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Agenda
Post Office Board Agenda (CCRC meeting)
Thursday 12 August 2021 15:00 — 16:30 hrs Microsoft Teams
Meeting/ Finsbury Dials
* Ben Tidswell (inthe I ¢ ZarinPatel(NED) I ¢ Ben Foat (General Counsel) * Veronica Branton (Company
chair) Secretary)
Tom Cooper (NED) I © AlisdairCameron I ¢ _Rodric Williams (Head of Legal - I © Nick Vamos (Peters & Peters
(CFO) Historical Matters) Solicitors LLP)
Alan Watts (Herbert Smith
Freehills)
‘Apologies: Tim Parker (Chairman), Ken McCall (SID), Carla Stent (NED), Lisa Harrington (NED), Elliot Jacobs (NED), Saf Ismail
(NED), Nick Read (CEO)
Join Microsoft Teams Meeting
i GRO} United Kingdom, London (Toll)
: 320 102 417#
Conference II
1. Welcome and Conflicts of Interest” Noting Chairman
2. Governance - Historical Remediation Committee (“HRC”) Discussion All
The Board is asked to discuss (for subsequent approval by
written resolution as appropriate) the:
a. The Board is asked to discuss (for subsequent
approval by written resolution as appropriate) the:
i. HRC membership;
ii. HRC Terms of Reference (“ToR”);
iii, “decision-making tools” for criminal appeals
referred to in paragraph 16 of the ToR, and
note that the Delegated Authorities
contemplate all “oppose” decisions going to
the full Board;
iv. financial limit on expenditure referred to in
paragraph 30 of the ToR, which the Delegated
Authorities propose at £5m.
b. The Board is also asked to discuss and agree the
mechanism for HRC reporting back on items requiring
Board approval, including outside regularly scheduled
meetings where necessary.
3. Criminal cases Noting Nick Vamos
Latest CACD Update
4. Overturned Convictions Approval Alan Watts
Interim payments — Board is asked to approve five further
interim payments
1 The Minutes from the CCRC Meeting held on 05" August 2021 and action log will be carried over to the next
scheduled CCRC Meeting.
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Historical Shortfall Scheme
i. Draft outcome letter structure — Board asked to
approve this approach be shared with Panel
ii. Draft explanations of Panel's recommendations to
the respective Applicant - Board asked to approve
this approach be shared with Panel
ili. Draft updated shortfall only test case panel packs -
Board asked to approve this approach be shared
with Panel
iv. Interest calculation methodology — Board asked to
discuss and note this approach which will be
shared with Panel
v. Distress and inconvenience — Board asked to
discuss and note the change to the Terms of
Reference
‘Approval
Alan Watts
Any Other Business
Dates for upcoming meetings and frequency of future
meetings of the HRC.
Noting
All
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2.2 HRC Terms o ce (“ToR") & Delegated Authorities
@ 2.2
POST OFFICE LIMITED
BOARD REPORT
a Historical Remediation Committee 2 ie
Title: protocols Meeting Date: I 12" August 2021
Author: Veronica Branton, Company Sponsor: Ben Foat, General Counsel
Secretary
Input Sought: Discussion
The Board is asked to discuss the draft Terms of Reference (ToR) and Delegated Authorities
(DAs) for the Historical Remediation Committee (HRC) and its approach to reporting back to
the Board and seeking approvals on decisions reserved to the Board.
Previous Governance Oversight
e Drafts of documents reviewed internally and comments received from UKGI.
Executive Summary
The Board meeting on 12'* August 2021 has been convened as such in advance of the
membership and ToR for the HRC being approved but will not be attended by all Board
Members. Therefore, the proposal is to discuss the ToR and DAs, reflect any feedback on these,
and seek approval from the full Board on these and the membership of the HRC by written
resolution. UKGI provided comments on the initial drafts of the ToR and DAs and but we will
seek their views and those of the BEIS SteerCo prior to seeking Board approval of the final
versions.
Terms of Reference and Delegated Authorities
Your comments are sought on the draft ToRs and DAs but in particular:
- Do these cover all the issues you think should be within the HRC’s remit?
- Do you think the approvals reserved to the Board are appropriate?
- Do the decisions reserved to the BEIS SteerCo align with Shareholder requirements?
The decisions reserved to the Board are intended to be where a decision sets a precedent or
has wider financial implications for the costs associated with historical matters. At the moment
decisions on “oppose” cases have been reserved to the Board but a decision could be taken to
delegate authority to the HRC to decide “oppose” cases where these meet established principles
Reporting back to the Board and referring decisions to the Board
In addition to the normal reporting back mechanism to each scheduled Board meeting, the
timelines for submissions to court and for meeting internally imposed deadlines means that
some decisions reserved to the Board may be required by written resolution and in some
instances an additional Board meeting may need to be convened. Ideally, the need for the
latter should be minimised which is one reason for making sure you think the matters
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Tab 2.2 HRC Terms of Reference (“ToR") & Delegated Authorities
reserved to the Board for decision are right. More detail is included in the DAs on all
decisions anticipated, including those that should not be required regularly, such as changes
to the Independent Advisory Panel's (IAP) ToR or changes to the de minimis level for the
HSS, but the table below sets out the regular decisions that are likely to be needed and
where it is envisioned the approvals will sit.
cohort
- Subsequent cases
that sit within a
defined cohort for
which principles
recommendation to
POL Board
Approve for
recommendation to
BEIS SteerCo
recommendation to
BEIS SteerCo
Decision HRC Board BEIS SteerCo
HSS
Submission of cases
to the IAP:
~ Test cases by Approve for Approve for Approve for
recommendation to the
TAP
Approve for
recommendation to the
TAP
settlement offers
rejected by claimants
recommendation to the
Board
prior consultation
with BEIS SteerCo
have been
established
Claim settlement Approve subject to Approve any cases To be consulted prior
offers proposed by prior consultation escalated to it by the I to the claim
TAP with BEIS SteerCo HRC subject to prior I settlement being
consultation with approved
Escalate any cases to
the Board as BETS steerco)
required.
Decisions Approve for Approve for Approve for
establishing a recommendation to recommendation to recommendation to the
precedent for how POL Board BEIS SteerCo IAP
other HSS claims
may be treated
Approach to Approve for Approve subject to To be consulted prior to
a decision being
reached.
Stamps Scheme
Consider claim
outcomes
recommended
Decisions which
establish a precedent
for how other
Stamps Scheme
claims may be
treated.
Approve
Approve for
recommendation to the
Board
Approve
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Tab 2.2 HRC Terms of Reference (“ToR") & Delegated Authorities
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not previously
considered identified
Board
Approach to Approve for Approve
settlement offers recommendation to the
rejected by claimants I Board
Criminal cases
Simple Concede Approve in - =
accordance with
decision-making
tools approved by
the Board
[Oppose - in [Approve] - =
accordance with
established
principles]
For discussion
Oppose - matters Recommend to the Approve -
Civil cases
Interim payments?
Approve
Decisions on
compensation
payments in
overturned criminal
cases and civil claims
within the
parameters of the
policy? approved by
the Board
Approve subject to
prior consultation with
BEIS/ UKGI
Consider
recommendations from
HRC. Any material
concerns to be
considered by HRC
before a decision is
taken.
Decisions which
establish a precedent
for how compensation
may be awarded.
Recommend to the
Board
Approve subject to
prior consultation with
BEIS/ UKGI
Consider
recommendations from
POL Board. Any
material concerns to be
considered by POL
Board before a decision
is taken.
1 Shareholder consent to proceed would be required in any instances where a payment was proposed in respect of a crown
court case only opposed on public interest grounds. BEIS would not fund any such payments.
? TBC.
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POST OFFICE LIMITED
(“the Company”) 2.2
Terms of Reference of the Historical Remediation Committee
The Historical Remediation Committee (HRC) is a Committee of the Company Board (“the
Board”) from which it derives its authority and to which it reports at each scheduled meeting.
Its authority is always subject to the powers and duties of the Board, as set out in the Articles
of Association.
A. PURPOSE
1. The purpose of the HRC is to:
i) Oversee the administration of the Historical Shortfall Scheme (HSS); consider
the principles that underpin how HSS claims are assessed for the consideration
of the HSS Independent Advisory Panel (IAP); consider claim outcomes
recommended by the IAP (including those recommending offers of financial
compensation); recommend to the Board decisions on precedent setting
matters; and consider any other matters escalated to the HRC for decision;
ii) Oversee the administration of the Stamps Scheme;
iii) Decide, in accordance with decision making tools approved by the Board, the
Company’s stance on appeals to the Court of Appeal (Criminal Division),
Scottish Court of Appeal and Crown Court of convictions where Post Office
acted as prosecutor;
iv) Oversee the management of claims for compensation made against the
Company by those whose who have convictions overturned;
v) Oversee the implementation of measures to enable conformance with the Post
Office Group Litigation “Common Issues” and “Horizon Issues” judgments and
resolve any other outstanding Group Litigation issues;
vi) Oversee the processes in place for the management of litigation costs across
all workstreams;
vii) Address such other matters as may from time to time be delegated to it by the
Board.
B. DUTIES AND RESPONSIBILITIES WITH REGARDS TO THE HISTORICAL
SHORTFALL SCHEME (HSS)
a Review and constructively challenge reports, management information and
financial information from the Historical Matters Business Unit (HMBU) and Legal
Team on the management of the HSS and consider any recommendations and
decisions sought.
3. Review and discuss inputs to and outcomes from the IAP on any matters requiring
the Board's view or decision, following consultation with UKGI and the
Shareholdert.
4 Approve for recommendation to the Board HSS decisions which materially
affect scheme cost and/or timetable, set principles or establish precedent for how
different types of claim may be assessed (e.g. quantified, part-quantified,
unquantified, shortfall only), and how those claims may be treated within a
settlement offer, prior to their submission to the BEIS SteerCo and the IAP.
1 A POL / BEIS HSS Operations Agreement is in place and this sets out HMG approval
points during the HSS process. A BEIS SteerCo for the HSS has also been established.
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Terms of Reference of the Historical Remediation Committee 2.2
5. Approve for recommendation to the Board test cases suitable for submission to
the IAP, prior to their submission to the BEIS SteerCo and the IAP.
6. Approve settlement claim offers on receipt of recommendations from the IAP,
prior to their submission to the BEIS SteerCo. Where further information is
required from the IAP before a decision can be made the HRC’s questions will be
conveyed to the IAP for consideration.
7. Approve for recommendation to the Board the approach to be taken within the
HSS to settlement offers which have been rejected by claimants, prior to their
submission to the BEIS SteerCo.
8. Approve for recommendation to the Board the IAP’s Case Assessment
Guidelines and changes to these guidelines, which set out the key applicable legal
principles outlined in the HSS Terms of Reference and Consequential Loss
Principles and Guidance.
9. Approve for recommendation to the Board the principles for the assessment of
different cohorts of claims, which are intended to assist the consistent treatment of
cases by the IAP, in consultation with UKGI and the Shareholder, before final
submission to the BEIS SteerCo for approval.
10. Approve for recommendation to the Board any changes to the HSS or IAP
Terms of Reference, prior to their submission to the BEIS SteerCo.
11. Escalate to the Board any issue which the HRC considers requires the attention
of the Board.
C. DUTIES AND RESPONSIBILITIES WITH REGARDS TO THE STAMPS SCHEME
12. Review and constructively challenge reports, management information and
financial information from the Historical Matters Business Unit (HMBU) and Legal
Team on the management of the HSS and consider any recommendations and
decisions sought.
13. Approve for recommendation to the Board the principles that underpin how
Stamps Scheme claims are assessed.
14. Approve claim outcomes recommended (including those recommending offers of
financial settlement).
15. Approve for recommendation to the Board decisions which establish a
precedent for how other Stamps Scheme claims may be treated.
D. DUTIES AND RESPONSIBILITIES WITH REGARDS TO COURT OF APPEAL
AND CROWN COURT CASES
16. Review and constructively challenge reports, management information and
financial information from the Historical Matters Business Unit and Legal Team on
the management of cases from Potential Future Appellants (PFAs) received by the
Court of Appeal, Scottish Court of Appeal or referred to the Crown Court by the
Criminal Cases Review Commission (CCRC) and consider any recommendations or
decisions sought.
17. Approve stance on cases or refer cases to the Board for decision on stance in
accordance with the decision-making tools approved by the Board.
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Terms of Reference of the Historical Remediation Committee 2.2
18. Approve for recommendation to the Board any changes to the decision-making
tools which guide how the stance on cases will be decided.
D. DUTIES AND RESPONSIBILITIES WITH REGARDS TO THE ESTABLISHMENT
OF COMPENSATION ARRANGEMENTS FOR OVERTURNED CRIMINAL CASES
AND CIVIL CASES
19. Review and constructively challenge reports from the Historical Matters Business
Unit and Legal Team on legal, financial and operational advice on managing claims
for compensation made against the Company by those who have convictions
overturned.
20. Approve for recommendation to the Board the policy or parameters within
which the HRC may approve compensation offers and/or payments, including the
extent to which POL Board approval and BEIS/ UKGI approval may first be required.
21. Approve for recommendation to the Board decisions which establish a
precedent in relation to such compensation payments, prior to their submission to
BEIS.
22. Approve for recommendation to the Board decisions which fall outside the
policy or parameters within which the HRC may make compensation offers and/or
payments, prior to their submission to BEIS.
23. Escalate to the Board any issue which the HRC considers requires the attention of
the Board.
E. DUTIES AND RESPONSIBILITIES WITH REGARDS TO CONFORMANCE WITH
THE COMMON ISSUES AND HORIZON ISSUES JUDGMENTS
24, Review and constructively challenge reports, management information and
financial information from the Historical Matters Business Unit, Legal Team and
Post Office Limited BAU on work to ensure conformance with the Common Issues
and Horizon Issues judgments and consider any recommendations and decisions
sought.
FL REPORTING RESPONSIBILITIES/ INFORMATION SHARING/
GOVERNANCE
25. The Committee Chair shall report to each scheduled Board meeting on the nature
and content of the Committee’s discussion, recommendations and action to be
taken.
26. Report to the Board whatever recommendations it deems appropriate on any area
within its remit where action or improvement is needed.
27. Report on its activities in the Company’s annual report describing the work of the
Committee.
28. Report to UKGI and the Shareholder in accordance with the Operations Agreement
as shown at appendix 1 or as subsequently amended with the agreement of all
parties.
29. Approve for recommendation to the Board any changes proposed to the
delegated authority to the Historical Matters Committee.
G. AUTHORITY
30. The Committee shall have authority to appoint to obtain, at the Company’s expense,
legal or other professional advice on matters within its terms of reference as
required, up to a financial limit determined by the Board.
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Terms of Reference of the Historical Remediation Committee
H. COMPOSITION AND GOVERNANCE
Membership
31. The Committee Chair and members of the Committee will be appointed by the
Board, acting on the recommendation of the Nominations Committee.
32. In the absence of the Chair of the Committee at any meeting, the Committee
members present shall determine who shall chair the meeting.
33. It shall consist of at least three members, including at least two independent non-
executive directors and the BEIS Shareholder Representative.
Quorum
34. The quorum necessary for the transaction of business shall be two members.
Committee Secretary
35. The Company Secretary, or his or her nominee, shall act as Secretary to the
Committee and shall attend all meetings to keep minutes and record actions.
Frequency
36. The Committee shall meet as often as required but at least [Xx] times per year.
Governance
37. Meetings may be held in person or by telephone or other electronic means, so long
as all participants can contribute to the meeting simultaneously.
38. Notice of each meeting shall be given to all those entitled to participate at least two
working days before the meeting.
39. Meetings for the Committee may be convened by the Secretary in consultation with
the Chair, or by any member of the Committee, at any time. The Secretary will be
responsible for setting the venue date and time of meetings in conjunction with the
Chair. All papers supporting the meeting will be issued not less than 2 days in
advance of the meeting date.
40. Minutes of each meeting will be circulated to all members of the Committee.
41. The Committee Secretary shall provide current and new Committee members with
any training, briefings or induction required under the supervision of the Chair.
42. Only members of the Committee have the right to attend Committee meetings.
Others may be invited by the Chair to attend all or part of any meeting, as and
when appropriate.
43. The Committee shall have access to sufficient executive time and resources in order
to carry on its duties, including access to the Company Secretariat.
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Terms of Reference of the Historical Remediation Committee 2.2
44. If there should be disagreement between the Committee and the full Board, the
Chairman of the Board shall make time available for discussion of the issue so that
the matter may be resolved.
I. ANNUAL REVIEW AND APPROVAL
45. The Committee will undertake an annual review of its performance and the Terms
of Reference. The outcome of these reviews will be recommended to the Board for
approval (notwithstanding amendments approved by the Board whenever so
required).
Approved by: Date: Version: Effective from:
Post Office Limited Board 1.0
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Appendix 1 - HSS POL/ BEIS Operations Agreement
HISTORICAL SHORTFALL SCHEME
POL / BEIS HSS OPERATIONS AGREEMENT
Purpose
1. The purpose of this document is to establish a common understanding, between Post Office
Limited (POL) and the Department for Business, Energy & Industrial Strategy (BEIS), of
the operation of the Historical Shortfall Scheme (HSS, or the Scheme).
Roles of POL and BEIS
2. The creation of the HSS was agreed as part of the settlement of the Post Office Group
Litigation (referred to as the “GLO”) in December 2019. Accordingly, both POL and BEIS
and their respective agents will work to ensure that HSS is delivered successfully. In
addition to resolving the claims that have been submitted to HSS, successful delivery of
HSS will be an important milestone in resolving the issues raised by the Horizon IT system
and restoring POL’s reputation as a business of national importance.
3. Throughout the duration of the HSS:
e POL has responsibility for the design, implementation, administration, management
and oversight and reporting of the HSS;
e BEIS has responsibility for agreeing key decisions related to the Scheme, limited to
those that affect its cost, fairness for claimants, the Value for Money being achieved
and any major legal risk, as well as the funding; and
e POL and BEIS are both responsible for progressing claims through the HSS
expeditiously and avoiding undue delay.
4. Approval points and responsibilities have been set out in the flowchart in Annex A to reflect
how the above roles interact with the decisions to be made.
Key Decision Points
5. POL and BEIS have agreed that BEIS has a number of approval rights in relation to the
operation of the HSS. These are:
5.1 Case Assessment Guidance
The Case Assessment Guidance is a detailed guidance document prepared by Herbert
Smith Freehills (HSF), solicitors instructed on behalf of POL, which sets out in detail the
key applicable legal principles outlined in the HSS Terms of Reference and Consequential
Loss Principles and Guidance. It will be used by HSS case assessors (Case Assessors)
in their assessment of applicants’ claims to the HSS and in the recommendations they put
forward for consideration by the HSS’s Independent Advisory Panel (the Panel).
BEIS will have the right to approve the Case Assessment Guidance prior to it being issued
to the Case Assessors and any substantive variations after any such approval has been
given.
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Appendix 1 - HSS POL/ BEIS Operations Agreement
After any such approval has been given, it is proposed that the Case Assessment Guidance
is provided to the Panel in advance of claims being put to the Panel for assessment and
recommendation and the Panel is given an opportunity to comment on the legal analysis in
the document. BEIS will have the right to provide input to POL’s response to the Panel’s
comments.
5.2 Guidelines for determination of claims by the Panel
POL will instruct HSF to put cohorts of similar claims (i.e. grouped claims for the same
heads of loss) (the Cohort or Cohorts) to the Panel with the objective of developing
guidelines for the assessment of similar claims going forward (the Guidelines). The claims
constituting any single Cohort (anticipated to be in the order of 15 to 25) will enable the
Panel to develop Guidelines which can then be applied to as many similar claims within the
HSS (to those in the Cohort) as is possible.
POL will instruct HSF to work with the Panel to identify the issues for which the Panel
wishes to develop Guidelines. POL will list the issues raised by the Cohort which is
proposed to be put to the Panel. BEIS will have approval rights over the list of issues before
the Cohort is provided to the Panel. If the Panel requests further or alternative cases to be
included in the Cohort, these shall also be subject to approval rights for BEIS before they
are shared with the Panel.
Subject to the views of Panel, it is proposed that the Guidelines could cover issues such as
the Panel's fairness discretion and quantum ranges for differing types of claimed loss.
The purpose of the proposed Guidelines is to assist in ensuring a consistent approach is
taken from the outset for all like claims, to streamline the process of investigating claims
and to give POL and BEIS oversight on the approaches the Panel may take on these
matters, and their anticipated financial implications.
BEIS will not participate in Panel discussions to develop the Guidelines, though it will have
the right to review the issues to be considered and approve any subsequent Guidelines
derived by the Panel. Although it is recognised that the Guidelines are not inflexible and
all claims will need to be assessed on their own facts, POL retains final approval over all
offers made by POL to applicants, which right of approval extends to BEIS through this
Operations Agreement.
5.3 Determination of Precedent Setting Claims
Some applicants’ claims are likely to set a precedent for how similar applicants’ claims
should be treated by the Case Assessors and the Panel, and consequently will have
implications for the overall cost of the HSS. It is envisaged that all claims which are initially
put to the Panel for recommendation and assessment have the potential to set such
precedents.
POL will notify BEIS as soon as practicable of all claims within each new Cohort (including
by providing copies of the relevant application documents and case assessments) in
advance of their being put to Panel for assessment and recommendation until such time as
BEIS considers that a more targeted and streamlined approach is appropriate.
POL will provide updates to BEIS reporting on the recommendations made by the Panel
with respect to any precedent cases and the likely cost implications to the overall Scheme.
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Appendix 1 - HSS POL/ BEIS Operations Agreement
BEIS will have the right to approve any recommendation made by a Case Assessor to the
Panel that is considered to set a precedent, including in respect to each Head of Loss, part
quantified and unquantified claims. BEIS will retain the right to approve any offer made by
POL to an applicant following a recommendation by the Panel.
Since it is expected that a number of applicants’ claims may contribute to the setting of any
given precedent, BEIS’s approval rights will extend to all such applicants’ claims.
A precedent setting case is considered to be any claim where a recommendation made by
the Case Assessors or the Panel establishes a position regarding any given aspect of that
claim or a position regarding the size of any offer made to an applicant that could be
considered repercussive or determinative for one or some other applicants’ claims.
As all initial cases in each Cohort have the potential to be precedent-setting, POL will work
with BEIS to ensure that BEIS has visibility over all such cases and to provide BEIS with
sufficient information, including as to the cost implications to the overall scheme of the
precedent being set, with which to make an informed decision on the relevant cases or
principles.
Once a critical mass of claims has been determined, POL will work with BEIS to agree
which future claims should be treated as precedent setting (for example, a precedent
setting case may be one where the recommendation, by either the Case Assessor or the
Panel, is outside of a financial tolerance range to be agreed with BEIS). Subject to (1)
agreement between POL and BEIS about the financial tolerance range, and (2) HSF’s
agreement that it can reasonably identify offers which fall inside and outside of that range,
POL will procure HSF to identify any such case which falls outside of the financial tolerance
range to BEIS, and BEIS will have the right to approve any such precedent-setting offer
prior to it being made.
POL will work closely with BEIS during points 2.1 and 2.6 of the flow chart to consider and
review precedent setting cases, and this will include such meetings as are required.
5.4 Escalation and Mediation
Since applicants to the HSS are not compelled to accept offers made to them by POL, POL
has included a good faith meeting, an escalation meeting and a mediation stage into the
design of the Scheme which an applicant can elect to pursue. POL will not make any
increased offers to applicants at a good faith meeting, as the purpose of these meetings is
to allow POL to explain to applicants the basis on which an offer has been made to them.
BEIS does not have approval rights over these meetings. BEIS will however have the right
to approve the parameters determining POL’s negotiation position in relation to any
escalation meeting or mediation meeting.
Value for Money Analysis
6. POL will provide BEIS with a Value for Money (VfM) analysis, updated from time to time,
that demonstrates the merits of proceeding with the HSS instead of proceeding with any
alternative options. Any anticipated increase in the expected overall cost of the HSS will
require HMG approval and an updated VfM analysis.
7. Itis understood that POL has provided BEIS with an initial estimate of £160m - £320m for
settlement costs pursuant to the HSS. POL should provide BEIS as accurate a cost
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Appendix 1 - HSS POL/ BEIS Operations Agreement
estimate as possible, with updated information as the Scheme progresses, to enable
overall cost of the HSS to be monitored and assessed against that estimate regularly.
Updated cost estimates will provide a detailed analysis of movements in the cost estimate
to include changes in claim estimates, claims settlement experience, movements in claims
from unquantified or partially quantified to quantified etc.
Monitoring Arrangements
8. POL and BEIS have agreed to the following monitoring arrangements:
8.1 Monthly Monitoring Meeting
POL will meet with BEIS’s working level team monthly, or more frequently if required, to
discuss progress made during the operation of the HSS, including provision of updated
monitoring information to BEIS within an agreed reporting template. This will include but is
not limited to:
- Mlcovering all applications to the Scheme including a split by where they sit within the
various stages of the HSS;
- an-up to date cashflow forecast;
- _anup to date cost estimate for the HSS (including explanatory notes);
- any major changes to the risks / issues assessment reported at the quarterly Senior
Responsible Officer meeting; and
- Information to monitor POL and BEIS’s responsibilities under the Public Sector Equality
Duty (PSED).
POL and BEIS will agree an initial cost estimate and a template for monitoring movements
in the cost estimate prior to any settlement offers being made to claimants other than in
relation to de minimis claims. This will include target ranges for the number of applications
processed and together with the initial cost estimate will be used as a baseline for
monitoring going forward. This will be updated from time to time.
It is recognised that that monitoring information may change from time to time as the
Scheme develops and/or other priorities arise over the Scheme’s lifecycle.
8.2 Quarterly Senior Responsible Officer Meeting
POL will meet with BEIS’s senior HSS team on a quarterly basis, including the BEIS Senior
Responsible Officer, to provide an update on Scheme progress and outlook for expected
cashflows and costs. The information reported at this meeting will be the same as the
information provided at the most recent Monthly Monitoring Meeting but also include an
assessment of risks and issues affecting the Scheme. This meeting will be a stocktake for
BEIS and will provide the opportunity for BEIS to pause the HSS if VfM can no longer be
established or if there are serious operational issues with the HSS until such time that these
issues are resolved.
9. Should BEIS take the decision to pause the scheme as above, BEIS and POL will agree
an action plan to resolve the issues identified with the aim of restarting progress on the
scheme (or an alternative scheme to replace the Scheme to resolve legitimate claims
under the Scheme) as soon as BEIS and POL are confident that the issues have been
addressed. Issues should be escalated via the appropriate channels within BEIS and POL
when required
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Tab 2.2 HRC Terms of Reference ("ToR") & Delegated Authorities
10.
POST OFFICE LIMITED
Appendix 1 - HSS POL/ BEIS Operations Agreement
BEIS reserves the right to undertake an independent audit from time to time of settlement
offers made through the Scheme to ensure operating parameters are being adhered to.
Cost Sharing Arrangements
11.
The cost sharing arrangements regarding the funding of the costs to deliver the HSS will
be set out in the relevant Funding Commitment Letter.
Review Points
12.
13.
14.
The operation of the Key Decision Points and Monitoring Arrangements will be reviewed
before the end of March 2021, June 2021, September 2021 and December 2021 and
thereafter as required by POL or by BEIS.
Through these Review Points BEIS may request that the HSS be paused should material
risks / issues be identified and appropriate remedial action be taken in a similar manner
as noted in 8.2 and 9.
BEIS reserves the right, acting in good faith and with reasonable justification to withdraw
its support for the Scheme at any point. This includes, but is not limited to, if BEIS
considers the overall Scheme cost has or could unreasonably increase above the
estimated ranges (as updated from time to time), if VfM can no longer be established or if
there are serious operational issues with the HSS. Should this be the case, BEIS and POL
will work together in good faith and expeditiously to find alternative means to resolve
legitimate claims under the HSS. The right of BEIS to terminate the support for the Scheme
is without prejudice to the funding commitment of BEIS contained in the funding
commitment letter dated
Other
15.
16.
It is recognised between BEIS and POL that the HSS Operations Agreement is considered
a ‘live’ document that will be updated from time to time as needed.
Any amendments must be approved by both POL and BEIS respectively.
Version 6.2 as at 25 February 2021
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2.2
Appendix 1 - HSS POL/ BEIS Operations Agreement
17. ANNEX A: Flowchart_of HSS Process - Maintained in separate PDF — BEIS
Assessment v 1.0 19.02 (extracted below)
BEIS Assessment vLO
19.02,pat
HSS - Pre Offer Preparation (UKGI/BEIS)
HSF
I Modeling
came vesaie
a rove Financial
Sarl I paccontl
Ly
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Tab 2.2 HRC Terms of Reference ("ToR") & Delegated Authorities
POST OFFICE LIMITED
2.2
Appendix 1 - HSS POL/ BEIS Operations Agreement
HSS - Pre Offer Preparation (UKGI/BEIS)
2. Cohort Guidelines
2.1 Identify
ven Cohorts and List
a \of Issues for Panel
= Guidelines
%, 2.2 POL Reviews
3 List of Issues for Po Reaapeaiteied
i Panel Guidelines hi /
2.3 UKGI/BEIS
Reviews List of 2.6 UKGI/BEIS
caries poms I AY
Guidelines Guidelines
z 24 Panel Devises I_I
& Panel Guidelines
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POST OFFICE LIMITED
2.2
Appendix 1 - HSS POL/ BEIS Operations Agreement
HSS - Pre Offer Preparation (UKGI/BEIS)
3, Financial Impacts
35 POU Review 39 Review
3 ReModeled Conor
Francs aoproacn
o
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POST OFFICE LIMITED 22
Appendix 1 - HSS POL/ BEIS Operations Agreement
HSS - Pre Offer Preparation (UKGI/BEIS)
fon New eae ar
Leia tres 47 UpasKoy
eedite: Princes! sore II
Aescament Preparasn
4570. Reew 49 Redew
3 ‘eModeled ‘chor
& ancl approach
fom)
Her __
o
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Key
Post Office Limited (POL) &220v#: Final authorisation ofa decison as worded under the Articles of Association and FO,
és fei Approve for recommendation: Authorisation to permit the request to be considered at the next governance stage.
(“the Company”) Permission is granted to proceed with a decision authorised by the Company as worded under the
‘Consent:
Delegated Autho! Articles of Association and FD.
‘The authorisation is only valid once consent has been received from the
Approve subject to Shareholder consent:
Shareholder as required under the Articles of Association and FD.
Decision
EIS: Department of Business, Energy & Industrial Strategy
HMBU: Historical Matters Business Unit
Aticle: Refers to Articl
HRC: Historical Remediation Committee
IAP: Independent Advisory Panel for the Historical Shortfalls Scheme (HSS)
FD: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL.
of Association of the Company as effective from 1/4
further information prior to proceeding,
POL00448627
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1020. These should be consulted for
HMBU
HRC of POL Board
POL Board
Shareholder
‘Independent Advisory
anel (IAP) Notes
N.b.: Spend authority. The POL Board reviews and approves the spend levels annually, including a spend authority for the CEO of up to £5m. The CEO may sub-delegate up to his spend limit and has delegated to the
Chair of the Historical Matters Business Unit a spend limit of up to £5m. The Board approves the annual budget, including HMBU spend, for recommendation to the Shareholder.
1. Historical Shortfalls Scheme (HSS)
1.1 Consider the Case Assessment Guidance (setting in detail
the key applicable legal principles outlined in the HSS Terms
of Reference and Consequential Loss Principles and
Guidance) and any material changes to the guidance.
Review the draft Case
Assessment Guidance
provided by Herbert
Smith Freehills for
recommendation to
HRC
Review the draft Case
Assessment Guidance
provided by Herbert
Smith Freehills for
recommendation to
BEIS SteerCo
Approve for
submission to the IAP
Adopt
11.2 Consider the principles that underpin how HSS claims are
assessed by cohort (e.g. Heads of Loss) and any material
changes to the principles for consideration by the HSS
Independent Advisory Panel (IAP).
Review the draft
Principles provided by
Herbert Smith Freehills
for recommendation to
HRC
Approve for
recommendation to
POL Board
Approve for
recommendation to
BEIS SteerCo
Approve the principles
for submission to the
TAP
If the SteerCo has
material concerns
about the proposed
principles these shall
be considered by the
Review and comment
on the principles.
Adopt Guidance
subject to resolving
any issues raised.
saquouiny payebajaq 9 (.~YO).,) sousIaJay Jo SUA) OYH 77 GEL
1.3 Consider claim outcomes recommended by the IAP (including
those recommending offers of financial settlement)
Approve subject to
prior consultation with
BEIS/ SteerCo
Consider and approve
any cases escalated by
HRC
POL Board
Make claim offer
following HRC/ POL
Board/ BEIS SteerCo
Consider approval*
recommendations
from HRC/ POL Board.
Any material concerns
to be considered by
POL Board before a
decision is taken.
* POL retains final
approval over all
offers made by POL
to applicants, which
Fight of _ approval
extends to BEIS
through the
Operations
Agreement.
‘Approve for
Provide options/ bag alr
recommendations to Approve for Approve for :
1 Decsons which eabish a precedent forhow other HSS_—I “ike tncuing cose I recommandaton to I reanprendaion to I Where ime are I I ppv
implaions tothe POL Board BEIS SteerCo Uebel bead elite
review their
recommendation.
1.5 Provision of cases for consideration by the Independent
Advisory Panel: Provide options/ ‘Approve for none arent Revie.
Test cases by cohort recommendations to I recommendation to ei Ne ee
eee mone aene recommendation to I recommendation to I recommendations an
BEIS SteerCo the IAP. advise POL Board of
If there are material
concerns POL Board
the approach it will
take to the category of
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Key
Approve: Final authorisation of a decision as worded under the Articles of Association and FD
Post Office Limited (POL) jorrove for recommendation: Authorisation to permit te request to be considered atthe next covernance stage
(“the Company”) Permission is granted to proceed with a decision authorised by the Company as worded under the
‘Consent:
Delegated Autho! Articles of Association and FD.
Approve subject to Shareholder consent: The authorisation is only valid once consent has been received from the
Shareholder as required under the Articles of Association and FD.
EIS: Department of Business, Energy & Industrial Strategy
HMBU: Historical Matters Business Unit
HRC: Historical Remediation Committee
IAP: Independent Advisory Panel for the Historical Shortfalls Scheme (HSS)
FD: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL.
020, These should be consulted for
Acticle: Refers to Articles of Association of the Company as effective from 1/4
further information prior to proceeding.
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Decision Independent Advisory
mu HRC of POL Board POL Board Shareholder rane! (IAP) Taken
will be asked to review I case illustrated by the
their recommendation. test case.
Subsequent cases that sit within a defined cohort for which I ___ Provide options/ abpralte for perce) for Cobenier cese.ane
src len have bean established. recommendations to I recommendation to recommendation to I make recommendation
ah HRC BEIS SteerCo the IAP. on claim settlement.
If there are material
concerns POL Board
will be asked to review
their recommendation.
Provide Approve for Approve for
1.6 Approach to settlement offers rejected by claimants recommendations to I recommendation to I recommendation to ‘Approve -
POL Board BEIS SteerCo
Provide Approve for
1.7. Changes to Terms of Reference for the Independent AdVISOrY I recommendations to ‘Approve for een ae a "
Panel recommendation to
BEIS SteerCo
the Board
2. Stamps Scheme
, Provide options/ Approve for
2.1 Consider the principles that underpin how Stamps Scheme Pe iid I [eh appre . .
claims are assessed.
HRC ard
Provide options/ Consider and approve
2.2 Consider claim outcomes recommended (including those Be ae apart ecyicadon eacal ode :
recommending offers of financial settlement)
HRC HRC
‘i Provide options/ Approve for
2.3 Decisions which establish a precedent for how other Stamps
recommendations to I recommendation to Approve - -
Scheme claims may be treated. po Me tend
2.4 Policy on treatment of Stamp Scheme claims (where the a ey
HMBU may take decisions or make recommendations and Produce draft policy te eer Need i sha . L
where matters should be escalated to the HRC/POL Board/ for HRC ool Hoeid PP
BEIS-UKGI SteerCo)
Provide Approve for
2.5. Approach to settlement offers rejected by claimants recommendations to I recommendation to Approve - -
POL Board
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Key
Approve: Final authorisation of a decision as worded under the Articles of Association and FD
Post Office Limited (POL) jorrove for recommendation: Authorisation to permit te request to be considered atthe next covernance stage
(“the Company”) Permission is granted to proceed with a decision authorised by the Company as worded under the
‘Consent:
Delegated Autho! Articles of Association and FD.
‘The authorisation is only valid once consent has been received from the
Approve subject to Shareholder consent:
Shareholder as required under the Articles of Association and FD.
Acticle: Refers to Articl
EIS: Department of Business, Energy & Industrial Strategy
HMBU: Historical Matters Business Unit
HRC: Historical Remediation Committee
IAP: Independent Advisory Panel for the Historical Shortfalis Scheme (HSS)
FD: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL.
of Association of the Company as effective from 1/4
further information prior to proceeding.
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020, These should be consulted for
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Decision Independent Advisory
mau HRC of POL Board POL Board Shareholder rane! (IAP) Askew
3. COURT OF APPEAL AND CROWN COURT CASES
Provide
3.1 Stance on cases which are within the parameters of the
decision-making tools approved by the Board alate ad Aone i Tenebete é
3.2 Oppose cases
Approve To be briefed i
Provide
3.3 Decisions on cases which set a precedent ‘Approve for
recommendations to I a onPPrOve I Approve Consult .
POL Board
Provide
<aie: Crranges to: Decistoni-mnekdng:tocts recommendations to ‘Approve - To be briefed -
4. COMPENSATION ARRANGEMENTS FOR OVERTURNED
CRIMINAL CASES AND CIVIL CASES
Consider
recommendations
Provide Approve for Approve subject to I from POL Board. Any
terete rrrarepensation payments for overtumed I recommendations to I recommendation to I prior consultation with I material concerns to -
POL Board BEIS/ UKGI be considered by POL
Board before a
decision is taken.
Consider
recommendations
4.2 Decisions which establish a precedent for how compensation Fave poorest pnorave mibjedt ie I rom ror ons Any
Pray be eaerdeal recommendations to I recommendation to I prior consultation with I material concerns to -
POL Board BEIS/ UKGI be considered by POL
Board before a
decision is taken.
Consider
4.3 Decisions which fall outside the parameters of the policy within ’ recommendations
which the HRC may take decisions in relation to compensation Provide Approve for ‘Approve subject to I from POL Board. Any
payrienta in bathicriminsliend civil cases recommendations to I recommendation to I prior consultation with I material concerns to -
POL Board BEIS/ UKGI be considered by POL
Board before a
decision is taken.
4.4 Decisions on compensation payments in overturned criminal panel Dacpi ie bones Nee isas
cases and civil claims within the parameters of the policy asian aeaeticaieiiatl lial oedeaorraah P from HRC. Any :
approved by the Board BEIS/ UKGI material concerns to
be considered by HRC
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L@vjoez
Key
Approve: Final authorisation of a decision as worded under the Articles of Association and FD
Post Office Limited (POL) jorrove for recommendation: Authorisation to permit te request to be considered atthe next covernance stage
(“the Company”) Permission is granted to proceed with a decision authorised by the Company as worded under the
‘Consent:
Delegated Autho! Articles of Association and FD.
Approve subject to Shareholder consent: The authorisation is only valid once consent has been received from the
Shareholder as required under the Articles of Association and FD.
EIS: Department of Business, Energy & Industrial Strategy
HMBU: Historical Matters Business Unit
HRC: Historical Remediation Committee
IAP: Independent Advisory Panel for the Historical Shortfalis Scheme (HSS)
FD: Framework Document between BEIS (Shareholder), UKGI (Shareholder Representative) & POL.
020, These should be consulted for
Acticle: Refers to Articles of Association of the Company as effective from 1/4
further information prior to proceeding.
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Decision mau HRC of POL Board POL Board Shareholder easyer ta Tikes
before a decision is
taken.
5. CONFORMANCE WITH THE COMMON ISSUES AND
HORIZON ISSUES JUDGMENTS
‘ A i Provide
5.1 Recommendations and decisions on achieving conformance
with the Common Issues and Horizon Issues judgments Veer bee eee Tg Papeete i
6. GOVERNANCE
6.1 Changes to Delegated Authority to Historical Matters Provide Approve for
Committee recommendations to I recommendation to Approve To be briefed -
HRC OL Board
Approve for
6.2 Report to each scheduled POL Board meeting Draft report recommendation to Review . 3
POL Board
6.3 Report to BEIS/UKGI in accordance with the Operations
‘Agreement Draft report Receive report Receive report -
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