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Agenda
Post Office Board Agenda (CCRC meeting)
Microsoft Teams
Meeting/ Finsbury Dials
Thursday 08 July 2021 15:00 — 16:30 hrs
© Tim Parker © Ken McCall (SID) ‘* Ben Foat (General Counsel) * Richard Taylor (Group Corporate
(Chairman) Affairs, Brand and
Communications Director)
* Tom Cooper (NED) I © CarlaStent(NED) I Rodric Williams (Head of Legal - I ¢ Veronica Branton (Company
Historical Matters) Secretary)
¢ Zarin Patel (NED) e Lisa Harrington Alan Watts (Herbert Smith Declan Salter (Historical Matters
(NED) Freehills) Director)
© Elliot Jacobs (NED) I © Saflsmail(NED) I Nick Vamos (Peters & Peters I * Kevin Hutchinson (Programme
Solicitors LLP) Manager, Horizon IT Inquiry)
(Item 4.)
** Nick Read (CEO) * Alisdair Cameron
(CFO)
Apologies: N/A
Join Microsoft Teams Meeting
f } United Kingdom, London (Toll)
Conference ID: 320 102 417#
Welcome and Conflicts of Interest Noting Chairman
2. Minutes and Matters arising Approval Chairman
Minutes from 24" June and 01% July 2021
3. Historical Shortfall Scheme: Test case materials Approval Alan Watts
Tranche 5
Claim 40
Claim 74
Claim 268
Claim 278
Claim 419
Claim 435
Claim 517
Claim 662
. Claim 1169
10. Claim 2141
PON AV a yy
4. Post Office Horizon IT Inquiry Approval Ben Foat & Kevin
Hutchinson
5. Any Other Business Noting All
STRICTLY CONFIDENTIAL
CCRC Meeting - 08 July 2021-08/07/21 1 of 187
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POST OFFICE LIMITED BOARD MEETING 2.1
Strictly Confidential and Subject to Legal Privilege - DO NOT FORWARD
MINUTES OF A CCRC MEETING OF THE BOARD OF DIRECTORS OF POST OFFICE LIMITED HELD ON THURSDAY 24
JUNE 2021 AT 20 FINSBURY STREET, LONDON EC2Y 9AQ BY CONFERENCE CALL AT 15.00 HRS*
Present:
Tim Parker Chairman (TP)
Ken McCall Senior Independent Director (KM)
Carla Stent Non-Executive Director (CS)
Zarin Patel Non-Executive Director (ZP)
Lisa Harrington Non-Executive Director (LH)
Tom Cooper Non-Executive Director (TC)
Elliot Jacobs Non-Executive Director (EI)
Alisdair Cameron Group Chief Finance Officer (AC)
In attendance:
Veronica Branton Company Secretary (VB)
Ben Foat Group General Counsel (BF)
Rodric Williams Head of Legal — Historical Matters Legal (RW)
Richard Taylor Group Corporate Affairs, Brand and Communications Director (RT)
Declan Salter Historical Matters Director (DS)
Lucie Lambert General Counsel - UKGI (LL)
Alan Watts Herbert Smith Freehills (AW)
Nick Vamos Peters & Peters Solicitors LLP (NV)
Simon Baker QC 2 Bedford Row (SB)
Jac Carey 2 Bedford Row (IC)
Zoe Johnson QC QEB Hollis Whiteman (21)
Peter Staniland Paralegal, Peters & Peters Solicitors LLP (PS)
Apologies: Nick Read (CEO) and Saf Ismail (NED).
Agenda Item Action
1. Welcome and Conflicts of Interest
A quorum being present, the Chairman opened the meeting. The Directors declared that
they had no conflicts of interest in the matters to be considered at the meeting in
accordance with the requirements of section 177 of the Companies Act 2006 and the
Company's Articles of Association.
2. Minutes and Matters Arising
The Board APPROVED the minutes of the Board meeting held on 17" June 2021.
The Board NOTED the action log.
3. CACD cases
+ Participation in the meeting was entirely via Microsoft Teams from participants’ personal addresses. In such circumstances
the Company's Articles of Association (Article 64) require that the location of the meeting be deemed as the chairman's
location. However, it was not deemed appropriate to record personal addresses on the Company record. As such, the
Registered Office is recorded as the meeting location
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POST OFFICE LIMITED BOARD MEETING 2.1
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4. ___HSS cases for the Independent Advisory Panel
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POST OFFICE LIMITED BOARD MEETING 2.1
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Lisa Harrington joined the meeting
The Board RESOLVED that the additional 12 shortfall only test cases should be submitte to
the Independent Advisory Panel for the Historical Shortfalls Scheme, subject to any
comments from the BEIS Steerco.
Settlement paper for the Independent Advisory Panel
The Board RESOLVED, subject to any comments from the BEIS Steerco, that:
1. _ in relation to any Network Transformation Settlement Agreements (or similar)
entered into prior to December 2019 the Independent Panel to the Historical
Shortfalls Scheme be directed that POL would not be seeking to bar Applicants from
the Scheme by enforcing the release in such settlements but account should still be
taken of the economic benefit of such settlements where overlap can be shown in
the amounts recovered under the previous settlement and the amounts being
claimed in the Scheme.
2. inrelation to any settlement agreements entered into under the previous mediation
scheme the Independent Panel to the Historical Shortfalls Scheme be directed that
POL would not be seeking to bar Applicants from the Scheme by enforcing the
release in such settlements but account should still be taken of the economic
benefit of such settlements where overlap can be shown in the amounts recovered
under the previous settlement and the amounts being claimed in the Scheme.
3. _ the paper on document sources be provided to the Independent Panel to the
Historical Shortfalls Scheme.
Surpluses paper for the Independent Advisory Panel (verbal update)
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POST OFFICE LIMITED BOARD MEETING
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Carla Stent asked Declan Salter how many of the surpluses could be explained. DS reported
that we had quite often been able to show the reason for the surplus and all of this
information was being provided to the IAP for the test cases.
Any Other Business
Historical Shortfall Scheme Options Paper
Declan Salter introduced the paper which was asking the Board to consider the principle of
whether we should investigate the shortfall as identified in the claim or for the entire
tenure of the Postmaster’s period in office. DS anticipated that the later approach would
lead to claims taking at least twice as long to resolve. The challenge was how we could
speed the process up for claimants and this paper was an attempt to address this. Al
Cameron adding that aiming to make the majority of the offers by December 2022 seemed
too slow. The proposals in the paper seemed a reasonable and proportionate answer but
claims could be investigated further if requested.
A number of points were raised and addressed, including:
© Tim Parker noted that it was hard to criticise the approach if settling at around the
level of the claim made but it was harder to know how deal with unquantified claims
* Tom Cooper supported the objective of speeding up the claims process but noted
We needed to be comfortable that the approach we followed was not
disadvantaging certain categories of claimants. We needed to see the timetable for Action: DS
settling claims set properly and with the assumptions that underpinned it so we
could test the logic of the decisions we were being asked to take. We needed that
evidence base, especially if additional costs might be incurred. DS explained that
while there would be additional costs but would also be savings. Overall it would not
more expensive to go quicker. TP said that while he was supportive in principle of
having sensible levels of investigation and a sensible de minimis he seconded TC’s
view that the Board needed to see the figures underpinning the arguments. Ken
McCall added that the timetable needed to provide assumptions on what would
happen if we did” x, y or” and its impact on the timetable
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POST OFFICE LIMITED BOARD MEETING 2.1
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TC noted that we also needed to know how many shortfalls had been found at L1, 2,
and 3 of the investigation stages. TC would not be comfortable with an abridged
approach if most shortfalls were found as part of L3 investigations. It was not
possible for the Board to take the decisions it was being asked to today. While the
Board supported the principle of getting things done quicker it needed to see the
timetable and how it was proposed to expedite claims settlement. The desire was to
pay up to the amount claimed but to be able to investigate other shortfalls if
discovered but we needed feedback from the IAP on this approach and this brought
us back to the ground rules for the investigation. DS reported that it might not be
possible to provide a number of options for speeding up the timetable. TP requested Action: DS
that the Board be provided with the evidence that would support recommending to
the IAP investigating up to L1 & 2 in the majority of cases
* TP requested that more specific calculations were provided to support the increased Action: DS
figure proposed for de minimis claims and added that this was a decision the Board
needed to take once it knew what the principles around investigation levels would be
and what approach the IAP was going to take. There needed to be an analytic
approach to this matter including consideration of how the de minimis approach
would affect the unquantified claims. It might prove to be right that we should
increase the de minimis level but we did not yet have the data to support taking this
decision
POL’s Stance on cooperating with the Solicitors Regulation Authority
The Board RATIFIED its decision confirming that POL’s stance remained that it wished to
cooperate with the Solicitors Regulation Authority’s (SRA) investigation, including by
providing information/documents (as previously stated); and noted that POL (through its
external legal advisers) was liaising with Ben Foat’s solicitors, and possibly the SRA, to
consider the response to the notice.
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POST OFFICE LIMITED BOARD MEETING
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Discussions with Government on interim payments
Al Cameron provided an update on the discussions with Government on making £100k
interim payments for those appellants whose claims had been overturned by the Court of
Appeal Criminal Division on grounds of limb 1 and limb 2 abuse of process. Government
focus was on what would happen if the appellant would only have received, say, £80k, in
compensation and we could not retrieve the additional sum already paid. We had
explained how unlikely this scenario was but noted that we retained discretion to make
different offers in individual cases. The subsidy rules created challenges for making the
payments and the BEIS lawyers had sought a view on whether POL was an insolvent player.
BEIS wanted to be able to provide the cover for the £90m of potential interim payments as
soon as possible and were keen to get payments resolved before the Summer Recess but
this timetable was not quick from our perspective because of the potential for further
proceedings if we could not make good our expressed wish to provide compensation
swiftly. Tom Cooper noted that we would either make payments under the existing rules
or would legislate to be able to make the payments if that were required; we might need
to announce that we were going to legislate to be able to make these payments so that
people knew the money was coming. It was agreed that a letter to the Minister should be
written.
Action: AC
[TC would report this to To do: TC
Carl Cresswell at BEIS.
Zarin Patel asked about the timeline for the IAP to respond to the various questions it was
being asked,
Respondent’s Notices
There being no further business the Chairman declared the meeting closed at 4.50 pm.
Chairman Date
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2.1
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MINUTES OF A CCRC MEETING OF THE BOARD OF DIRECTORS OF POST OFFICE LIMITED HELD ON THURSDAY 01
JULY 2021 AT 20 FINSBURY STREET, LONDON EC2Y 9AQ BY CONFERENCE CALL AT 14.00 HRS*
Present:
Tim Parker Chairman (TP)
Ken McCall Senior Independent Director (KM)
Tom Cooper Non-Executive Director (TC)
Carla Stent Non-Executive Director (CS)
Zarin Patel Non-Executive Director (ZP)
Lisa Harrington Non-Executive Director (LH)
Elliot Jacobs Non-Executive Director (EJ)
Saf Ismail Non-Executive Director (SI)
Alisdair Cameron Group Chief Finance Officer (AC)
Nick Read Group Chief Executive (NR)
In attendance:
Veronica Branton Company Secretary (VB)
Ben Foat Group General Counsel (BF)
Rodric Williams Head of Legal — Historical Matters Legal (RW)
Lucie Lambert General Counsel - UKGI (LL)
Alan Watts Herbert Smith Freehills (AW)
Nick Vamos Peters & Peters Solicitors LLP (NV)
Apologies: N/A
Agenda Item
1. Welcome and Conflicts of Interest”
A quorum being present, the Chairman opened the meeting. The Directors declared that
they had no conflicts of interest in the matters to be considered at the meeting in
accordance with the requirements of section 177 of the Companies Act 2006 and the
Company's Articles of Association.
Criminal Law Matters
Nick Vamos reported that the latest Respondent's Notices had been submitted to the Court of
Appeal Criminal Division (CACD). A couple of directions had been issued by the CACD with which we
needed to comply between now and 20" July 2021 but NV did not expect these to need to come to
the Board.
A timetable had been agreed with the CACD on 11 further cases which would be brought for
discussion by the Board on 5 August 2021.
Overturned Convictions
Admission of Liability
Action
) Participation in the meeting was entirely via Microsoft Teams from participants’ personal addresses. In such circumstances
the Company's Articles of Association (Article 64) require that the location of the meeting be deemed as the chairman's
location. However, it was not deemed appropriate to record personal addresses on the Company record. As such, the
Registered Office is recorded as the meeting location.
2 The Minutes from the CCRC Meeting held on 24® June 2021 and action log will be carried over to the next scheduled CCRC Meeting.
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POST OFFICE LIMITED BOARD MEETING
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Action: AW
To do: AW
3.2 Interim Payments
There was a meeting with the BEIS SteerCo this week and there would be a further
meeting next week and some information had been provided in response to requests from
the SteerCo. Al Cameron added that daily communications were taking place with
Government on interim payments and the business case had been submitted to BEIS. It
was a long process because of the nature of the subsidy regime. We had to set out a
broad category of claims/ potential claims as well as requesting the £90m for the interim
payments because such a submission could only be made once every five years. Tom
Cooper reported that we had dealt with the most complicated issues from a process
perspective. We had also asked whether we could let the claimants’ solicitors know that
we were working on being able to make interim payments and should receive a definitive
statement on this shortly.
Historical Shortfalls Scheme: Surplus Issue
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POST OFFICE LIMITED BOARD MEETING
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Ho do: TC/
Aw
Tom Cooper left the meeting.
To do: E/
AW
The Board APPROVED sending the paper to go to the IAP, subject to reflecting the
To do: AW
comments raised.
5. Any Other Business
There being no further business the Chairman declared the meeting closed at 14.40 hrs.
Chairman Date
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Post Office Limited Board CCRC Actions as at 06.07.2021
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REFERENCE
ACTION
ACTION OWNER I DUE DATE
STATUS
OPEN/CLOSED I
8. Potential claims against F
Board (CCRC) Meeting 18 March 202
Board (CCRC) Meeting 29 April 2021
5. Potential Future Appellants (PFAs):
update on 40 new appeals and
Hecision on extension for service of
Respondent's Notices
Board (CCRC) Meeting 06 May 2021
. Improvement Delivery Group (IDG)
Update and preparation for the
Inquiry
8.1 Historical Shortfall Scheme:
Decision-making
Board (CCRC) Meeting 24 September 2020
Alan Watts
Open
Alan Watts
Will come back to Board in 2-3 weeks’ time.] Open and
Ongoing
Ben Foat
Declan Salter/ Alan
Watts
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Post Office Limited Board CCRC Actions as at 06.07.2021
REFERENCE ‘ACTION ‘ACTION OWNER I DUE DATE STATUS OPEN/CLOSED I
g
p)
B.1 Historical Shortfall Scheme: ‘C asked how we demonstrated the financial I Declan Salter JA paper is being drafted for the Boardto I Open
Decision-making difference in settlement offers depending on review the approach to investigation
b) hich level of investigation was carried out. DS procedures.
ould provide more information and analysis
jor the Board on the “L123” proposals and
noted that this was not a one-off decision for
he Board.
8.1 Historical Shortfall Scheme: Alan Watts Open
Decision-making
4)
a 8.2 William Michael Penney Alan Watts Open
8.6 Asif Latif Alan Watts ‘Open
a)
B.6 Asif Latif Alan Watts Open
b)
Board (CCRC) Meeting 10 June 2021
8.3 Standstill agreement [Tom Cooper asked for Alan Watts to provide theI Alan Watts Open
Board with the pros and cons of admitting
a Strictly Confidential Page 2 of 4
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REFERENCE ‘ACTION ‘ACTION OWNER I DUE DATE STATUS OPEN/CLOSED 8
a. Tranche 2 and Tranche 3 Test cases July 2024 [Draft paper being discussed internally and I Open
hould be shared with the Board for the
meeting on 1% July 2021.
Board (CCRC) Meeting 24 June 2021
i7-1 Historical Shortfall Scheme OptionsWe needed to be comfortable that the approachDeclan Salter ‘Open
Paper e followed was not disadvantaging certain
by ategories of claimants. We needed to see the
imetable for settling claims set properly and
ith the assumptions that underpinned it so we
{could test the logic of the decisions we were
being asked to take
[7.1 Historical Shortfall Scheme OptionsITP requested that the Board be provided with [Declan Salter Open
Paper he evidence that would support recommending]
b) '0 the IAP investigating up to L1 & 2 in the
majority of cases
/7-1 Historical Shortfall Scheme OptionsITP requested that more specific calculations [Declan Salter Open
Paper ere provided to support the increased figure
ly proposed for de minimis claims and added that
his was a decision the Board needed to take
lonce it knew what the principles around
investigation levels would be and what
lapproach the IAP was going to take. There
needed to be an analytic approach to this
Imatter including consideration of how the de
Iminimis approach would affect the unquantified
(claims.
/7.3 Discussions with Government on [Tom Cooper noted that we would either make [Al Cameron Open
interim payments payments under the existing rules or would
legislate to be able to make the payments if that
ere required; we might need to announce that
/e were going to legislate to be able to make
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a
Post Office Limited Board CCRC Actions as at 06.07.2021 S
REFERENCE ‘ACTION ACTION OWNER I DUE DATE STATUS OPEN/CLOSED z
S
5
hese payments so that people knew the money
as coming. It was agreed that a letter to the
[Minister should be written.
3.1 Admission of Liability
10-1Z0z Ain
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wo
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MITH Confidential and Privileged
Miz,
N ly, HERBERT
Zw = FREEHILLS HSF draft: 6 July 2021
ZS
POST OFFICE
HISTORICAL SHORTFALL SCHEME
TEST CASES — TRANCHE 5
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Tab 4 Post Office Horizon IT Inquiry
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POST OFFICE LIMITED BOARD MEETING
REPORT
seta Post Office Horizon IT Inquiry: Meeting
Title: Proposed Strategy Date: 8 July 2021
Author: Kevin Hutchinson Sponsor: group General Counsel: Ben
Input Sought:
The Board is asked to discuss and approve the strategic approach, the tactical issues to be
discussed with the Inquiry office and note the project management update, including
governance and budget.
Previous Governance Oversight
GE Meeting of 30 June 2021
Executive Summary
1. On 1 June 2021, the Post Office Horizon IT Inquiry (“The Inquiry”) became a statutory
inquiry with expanded Terms of Reference (“ToR”). The expanded ToR enable it to consider
the recent judgments from the Court of Appeal Criminal Division (“CACD”) and other
historical practices of Post Office. Statutory inquiries are typically more legalistic and
explore matters more forensically. In most cases, they take longer to conclude.
2. As statutory inquiries are governed by legislation, the Inquiry will now be able to compel
evidence, request witness statements in advance of oral hearings and take evidence under
oath. Oral hearings will be taking place in public. Alongside the formal hearings, there will
also be a process for people to "tell their story" to contribute to a better understanding of
the human impact. The Inquiry is aiming to submit its findings to the Secretary of State for
BEIS in Autumn 2022. This is accompanied by an ambitious timetable’.
3. The Board is asked to approve:
« The adoption a more proactive engagement strategy with the Inquiry.
« Establishing clear governance arrangements and, once appointed, delegating authority
to the Inquiry Director regarding correspondence, procedural matters and giving
instructions to Post Office’s legal representatives when needed.
« Writing to the Inquiry’s solicitor to request a meeting. At which, Post Office will:
i. Seek further guidance regarding the proposed timetable including when the issues
covered by the Inquiry are likely to be finalised, at what point the identity of likely
witnesses will be determined, and establish what assistance Post Office can provide
in helping the Inquiry meet the deadlines it has set. Care will be taken to ensure that
this will not be perceived as Post Office seeking preferential treatment or seeking to
direct the inquiry.
ii. Seek clarity regarding the Inquiry’s approach to documentation, including privilege
and whether the Inquiry is willing to receive privileged material on a limited waiver
basis.
« Post Office applying for Core Participant status.
+ Please see Annex C
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4. The move to a statutory footing, expanded and ambitious timeline, and emphasis on
prosecutions necessitates bolstering the current programme team and level of support
received from legal and external counsel. Accordingly, the Board is asked to note a
projected budget increase from £1.6m to £9m. Upon publication of the List of Issues’, the
Board will be asked to approve a finalised budget for the duration of the Inquiry. In the
Interim, the Board is asked to approve instructing HSF to support with the execution of the
strategic approach and tactical issues contained within this paper.
Questions addressed
1. What Statement did the Chairperson of the Inquiry make on 19 May 2021?
2. What are the key differences between a non-statutory and statutory Inquiry? What
implications does this have for Post Office?
3. What should Post Office's strategy be? What issues should Post Office be raising now with
the Inquiry and how should it engage with it? What else should Post Office be considering
and what decisions will it need to take?
4. What impact will these changes have on governance, management and cost of the Inquiry
programme?
Report
1. On 19 May 2021 Paul Scully MP? made a statement* to Parliament, confirming the Inquiry
will be converted to a statutory footing from 1 June 2021. Sir Wyn Williams, the Chairperson
of the Inquiry, subsequently provided a written statement in which he said the powers
available to a statutory public inquiry were necessary to support a proper assessment of all
the relevant facts in relation to the recent judgments from the CACD, in the context of the
Judgments from the civil litigation. Sir Wyn said it was for these reasons that he made the
request to the Minister for the Inquiry to become a statutory Inquiry.
2. Sir Wyn also asked for some amendments to be made to the ToR. A comparison between
the previous and new ToR is included in Annex A. The key changes are:
e The broadening of scope to include reference to the recent judgments from the CACD
and overturning of criminal convictions, including Post Office’s use of information from
Horizon when taking action against persons alleged to be responsible for shortfalls.
Previously, the ToR had explicitly stated criminal matters were outside the scope of the
Inquiry.
e The examination of governance and whistleblowing controls being expanded to include
those which were in place historically.
3. Legal has advised on the key differences between non-statutory and statutory inquiries and
the implications for Post Office. These are set out at Annex B.
4. On 11 June 2021, Sir Wyn published a new Statement of Approach ("SoA 4”) to provide
details on how the Inquiry will now proceed - a summary for which is provided below.
e The Inquiry will operate under the Inquiries Act and Rules.
2 The detailed matters the Inquiry is considering within its ToR
3 Minister for London and Parliamentary Under Secretary of State (Minister for Small Business, Consumers and Labour Markets)
* Within his written statement, the Minister stated “Government wants to be fully assured that through the Inquiry there is a public
summary of the failings associated with Post Office Ltd's Horizon IT system. The Inquiry will draw on the findings made by Mr
Justice Fraser from the Bates and others v Post Office Limited Group Litigation (in particular Judgment (No3) ‘Common Issues’ and
Judgment (No 6) ‘Horizon issues’), the judgments of the Court of Appeal (Criminal Division) in R v Hamilton and others, and other
judgments in which convictions have been quashed. It will consider all other relevant evidence, listen to those that have been
affected, understand what went wrong, and assess whether lessons have been learned and whether concrete changes have taken
place, or are underway, at Post Office Ltd.”
2
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e® Segun Jide from the Government Legal Department has been appointed as Solicitor to
the Inquiry, with Jason Beer QC of 5 Essex Court and Julian Blake of 11KBW as Counsel.
« There will be an enlarged Inquiry team, an independent website, a document
management system for review and disclosure to Core Participants and a venue for the
public hearings and for the Inquiry to conduct its work.
« The Inquiry team are drafting 'Protocols' to address outstanding issues such as
Redactions and Document Handling, Restriction Orders, Costs, and Anonymity.
« Alongside the formal hearings®, there will be a process for people to "tell their story” to
contribute to a better understanding of the human impact.
5. The Inquiry is aiming to submit its findings to the Secretary of State for BEIS in Autumn
2022. The associated timetable set out within Annex C.
What should Post Office's engagement strategy be?
6. The Inquiry's move to a statutory footing will necessarily require an increased degree of
formality and legal process, and this presents Post Office with an opportunity to revisit its
strategic approach during this period of change. While Post Office will continue to assist
and accommodate the Inquiry as much as it can, a more pro-active engagement strategy
with the Inquiry is considered desirable to address historic issues with ‘last-minute’
requests. A more pro-active engagement strategy will also serve to put Post Office in the
strongest position that it can be for its own preparation, in terms of the identification and
provision of relevant documents to the Inquiry, the preparation of witness statements, and
the subsequent oral hearings to take place.
7. This strategy will involve:
e¢ Continued frequent and direct dialogue with the Inquiry team and early engagement
regarding matters of relevance and importance to Post Office.
e Advocating Post Office's position through written and verbal correspondence.
e Prompt identification and clarification of ambiguity in the Inquiry's protocols and
processes.
e¢ Clear explanations in order to manage the Inquiry's expectations (for example,
explaining the documentation that Post Office does and does not hold, and which parties
may hold it e.g. Royal Mail and/or Fujitsu).
What issues should Post Office be raising now with the Inquiry and how should it
engage with it?
8. There are a number of matters arising from SoA4 which, in accordance with its more pro-
active strategy, should be raised with the Inquiry as soon as possible. While some of these
matters may be resolved in the yet-to-be published Protocols, others may not be, and so
by bringing these issues to the Inquiry's attention now, it is hoped that the Inquiry may be
able to take them into account to ensure that they are adequately addressed.
9. By the Inquiry's own admission, the timetable is "ambitious" however SoA4 notes that "Sir
Wyn is determined that it should be achieved to the fullest extent possible". The Inquiry
(in its previous non-statutory form) has been operating since October 2020 and has said
that it intends to "build upon the work that has been done to date" which may be one
explanation for the 'indicative' timetable.
10. The timetable only provides three months for the determination of the List of Issues, the
approach for written witness statements, and the deadline for submitting them. Depending
SSeparately, Sir Wyn has committed to setting out in September the relevant details of the public hearings he intends to convene
later this year and into 2022.
3
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on the nature and size of the List of Issues and the number of witness statements sought
from current Post Office employees / Board members, this may be an insufficient amount
of time for Post Office and the witnesses to respond comprehensively.
11. There is also no provision in the timetable for Post Office to have a dialogue with the Inquiry
about the appropriateness of current employee/Board member witnesses giving evidence
about historical matters they may not have been involved with at the time, should they be
asked to do so. Post Office should seek further clarification and guidance with the Inquiry
as soon as possible to ensure that POL can best support the Inquiry in respect of this point
. There are a number of ambiguities in the Inquiry's approach to documents and answers
to the following questions should be sought:
e What further documentation does the Inquiry want from Post Office? What documents
will the Inquiry share with Core Participants versus the public, and will it share what
has been disclosed to date?
e What document platform will the Inquiry use and how does it want to receive documents
going forwards? Will the Inquiry's document platform be compliant with Post Office's
own ICO obligations for data security?
14. The Inquiry Chair, Sir Wyn Williams has commended Post Office’s participation in the
Inquiry to date. Following the move to a statutory footing, Post Office should ask the Inquiry
whether the approach to identifying and disclosing relevant documents needs to change.
To date, Post Office has relied on certain individuals within the business providing the
relevant documents that they hold and are aware of to the Inquiry team for disclosure,
rather than a process of harvesting and reviewing custodians’ email data, shared drives
and other document repositories. This question is important to ask in light of the increased
(and potentially criminal) consequences for failure to provide requested documents to a
statutory inquiry, and to ensure there is transparency about the approach Post Office has
taken.
15. If the Inquiry indicates that the approach to identifying and disclosing relevant documents
needs to change, a more robust search, review and disclosure process may need to be
performed. While this could result in significantly more documents being disclosed and
more expense incurred, it is likely to be preferable to the Inquiry criticising Post Office in
its report and in the press for failing to identify and provide relevant documentation and/or
hampering its investigation. Post Office should also clarify for the Inquiry the documents
that it does and does not hold to ensure that the Inquiry does not expect Post Office to
produce material that it does not have, and that that Inquiry asks the correct parties who
will likely hold the documentation sought.
16. Post Office should ask the Inquiry whether it will receive privileged documents on a
‘limited waiver basis for a specific purpose’. This was the approach the Inquiry indicated it
would adopt before it moved to a statutory footing, but it is not yet clear if this remains the
Inquiry's position now and how that might fit with the Inquiry providing disclosure of certain
documents to Core Participants.
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Office Horizon IT Inqu
@
17. If the Inquiry is content to proceed on this basis, this would mean that Post Office could
share its relevant privileged documents (e.g. previous legal advice it has received, and
communications with its legal advisers and third parties for the dominant purpose of the
group litigation) on this limited basis with the Inquiry without losing its privilege in that
material in relation to third parties. This should be Post Office's preferred position as it will
enable the Inquiry to understand the legal advice that it received and which formed the
basis for some decisions that Post Office took, whilst otherwise maintaining its privileged
status. However, if the Inquiry is not prepared to proceed on this basis, Post Office will
need to consider whether to waive its privilege over some or all of its relevant privileged
material, or not, and the implications of either approach could have far-reaching
consequences. The Board will be kept updated on this position and asked to make a decision
on this point in due course, if needed.
18. Post Office has provided documents to former employees and board members upon
their request to assist their preparation for the Inquiry. As the Inquiry's ToR now
encompass the historical prosecutions which effectively ceased in 2013, it is anticipated
that more requests may be made for documentation from further individuals involved at
that time. Indeed, we have already received further requests from former employees. Post
Office should ensure that the Inquiry is content with it providing these documents to these
individuals, because unless specifically requested, the Inquiry will not have sight of the
material sought and provided.
19.
20. It is recommended that Post Office write to the Inquiry's Solicitor through its legal
representative (when appointed) in order to request a meeting to raise the above questions
and concerns either at a meeting or in correspondence.
What else should Post Office be considering and what decisions will it need to take?
21. Post Office will either be invited by the Inquiry to be designated as a Core Participant, or
it_could otherwise apply through submitting the relevant application form.
22. Applications for CP status are due by 20 July 2021, with final decisions to be taken by the
Inquiry by 10 August 2021. The Board is asked to approve the recommendation that Post
Office apply for Core Participant status.
23. Core Participants typically have formal legal representatives (solicitors) in statutory
inquiries, who advocate and communicate on their behalf. Likewise, Legal Counsel (usually
a QC assisted by a junior barrister) are also appointed to attend and make opening and
closing submissions on the Core Participant's behalf at the Oral Evidence hearings, and in
respect of any procedural applications that may be required (for example, SoA4
contemplates an oral hearing for Core Participants, if needed, in order to finalise the List of
Issues the Inquiry will consider).
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Tab 4 Post Office Horizon IT Inquiry
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24. Given the pace at which the Inquiry intends to move forward, Post Office should appoint its
legal representatives as soon as possible and engage Counsel, as it is anticipated that other
Core Participants will also need to instruct Counsel too, which may result in less choice for
Post Office.
25. Post Office has received a number of enquiries from several former employees regarding
the extent to which they are covered by Post Office’s D&O insurance. POL's D&O policy
covers Insured Persons. These are individuals who hold/held positions as directors or
officers of POL, or POL employees "whilst acting in a managerial or supervisory capacity for
a Company" or "to the extent that such employee is named as a defendant in connection
with an Employment Practice Wrongful Act." Advice is being sought to determine whether
these individuals and or other former employees are covered by the two D&O polices which
have been notified in respect of Horizon issues (2012/2013 and 2019/20 Policies). Insurers
will consider claims for reimbursement of costs on a claim-by-claim basis, but cover is not
guaranteed. The position will be clearer once the Inquiry publishes its list of issues and who
will be called to provide evidence.
Impact on the governance, management and cost of the Inquiry programme
26. The diagram below shows the proposed composition of the governance groups and
programme team, together with the key accountabilities, responsibilities and activities. It
sets these within the context of the expanded Inquiry scope and the likely knowledge
sources to be drawn upon.
Inquiry Steering Group
+ tok Read + Renu Tayor
Gi inquy Dretton) © Keven einson
+ Ben Feat
?
Inquiry Oversight Group
“+ Chair (inquiry Director TEC) + GLO Conformance: IT (Simon Oidnal) + Data Pratecton (Cis Russell) id &
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pees ¥ 1
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i
FOP Renton EERE EEL Satanieniegeman Symon FE SSE)
‘Govemance. A Legal briefings (TEC)
Props Ags udgrnat 0G Tracker & GLO ContormancarenrsI
27. The Inquiry Steerco should be retained with delegated authority from the board to make
decisions in meeting Post Office's Inquiry objectives. Its specific accountabilities will include
making decisions regarding the strategic approach to the Inquiry and third parties, and
establishing the principles for proactive information sharing.
28. The Inquiry Oversight Group should continue with the responsibility to sign-off Inquiry and
third-party materials that follow the strategic approach and principles for information
sharing approved at the Inquiry Steerco. Attendees should be expanded to reflect the
6
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increased emphasis on legal oversight and alignment with progress against the GLO
commitments and improvements for postmasters.
The Inquiry Director will provide appropriate updates at all GE and board meetings.
29.
Programme Costs
30.
31.
Total spend to end-May 2021 is £1,406k against an authorised budget of £1,639k.
The programme has provided a forecast estimate for further spend based on the expanded
Inquiry scope and timeline, increased resource costs and revised provisional estimates from
suppliers based on their recommended support. This will be finalised upon publication of
the List of Issues.
The preliminary forecast estimate indicates a further spend of £7.6m (including counsel
fees but excluding third-party information request support from HSF) from June 2021 to
the end of the indicative Inquiry timeline, September 2022. However, given that the Inquiry
timeline is recognised as ambitious and subject to change, the programme recommends a
32.
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contingency of £3,235k, representing 6 months potential slippage.
33.
£9m.
The total estimated budget, based on the assumptions noted, excluding contingency, is
Annex A: Current vs Previous Terms of Reference for the Inquiry
Original Terms of Reference for Inquiry (10 June 2020)
Terms of Reference for Statutory Inquiry (19 May
2021)
‘A: Understand and acknowledge what went wrong in relation
to Horizon, leading to the Group Litigation Order, by drawing
on evidence from the Horizon judgments and affected
postmasters’ experiences and identify what key lessons must
be learned for the future.
‘A: Understand and acknowledge what went wrong in relation
to Horizon, leading to the civil proceedings in Bates and others
v Post Office Limited and the quashing of criminal convictions,
by drawing from the judgments of Mr Justice Fraser in Bates
and others, the judgments of the Court of Appeal (Criminal
Division) in R v Hamilton and others, other judgments in which
convictions have been quashed, affected postmasters’
experiences and any other relevant evidence in order to
identify what key lessons must be learned for the future.
B: Build upon the findings of Mr Justice Fraser, by obtaining all
available relevant evidence from Post Office Ltd, Fujitsu and
BEIS to establish a clear account of the implementation and
failings of Horizon over its lifecycle.
B: Build upon the findings of Mr Justice Fraser and the
judgments of the criminal courts specified in A above by
obtaining all available relevant evidence from Post Office Ltd,
Fujitsu, BEIS and UKGI to establish a clear account of 1) the
implementation and failings of Horizon over its lifecycle and 2)
Post Office Ltd's use of information from Horizon when taking
action against persons alleged to be responsible for shortfalls.
C: Assess whether Post Office Ltd has learned the lessons from
the criticisms made by Mr Justice Fraser in the ‘Common
Issues’ and ‘Horizon Issues’ trials and those identified by
affected postmasters and has delivered or made good progress
on the organisational and cultural changes necessary to ensure
a similar case does not happen in the future.
C: Assess whether Post Office Ltd has learned the lessons from
the criticisms made by Mr Justice Fraser in his judgments
following the ‘Common Issues’ and ‘Horizon Issues’ trials and
those identified by affected postmasters and has delivered or
made good progress on the organisational and cultural
changes necessary to ensure a similar case does not happen
in the future.
D: Assess whether the commitments made by Post Office Ltd
within the mediation settlement - including the historical
shortfall scheme - have been properly delivered.
D: Assess whether the commitments made by Post Office Ltd
within the mediation settlement — including the historical
shortfall scheme ~ have been properly delivered.
E: Assess whether the processes and information provided by
Post Office Ltd to postmasters are sufficient: (i) to enable both
parties to meet their contractual obligations (ii) to enable
postmasters to run their businesses. This includes assessing
whether Post Office Ltd's related processes such as recording
and resolving postmaster queries, dispute handling,
suspension and termination are fit for purpose. In addition,
determine whether the quality of the service offer for
postmasters andtheir relationship with PostOffice Ltd has
materially improved since the conclusions reached by Mr
Justice Fraser.
E: Assess whether the processes and information provided by
Post Office Ltd to postmasters are sufficient:
ito enable both parties to meet their contractual obligations
ii.to enable postmasters to run their businesses. This includes
assessing whether Post Office Ltd's related processes such as.
recording and resolving postmaster queries, dispute handling,
suspension and termination are fit for purpose. In addition,
determine whether the quality of the service offer for
postmasters and their relationship with Post Office Ltd has
materially improved since the conclusions reached by Mr
Justice Fraser.
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F: Examine the governance and whistleblowing controls now in
place at Post Office Ltd and whether they are sufficient to
ensure that the failings that led to the Horizon case issues do
not happen again.
The Review shall set out Post Office Ltd's actions in response
to the findings of Mr Justice Fraser. While avoiding a re-
examination of the findings made by Mr Justice Fraser through
the lengthy court proceedings, it must use these and the
experiences of affected postmasters as the basis for its work.
The Review should not encroach on the work of the Criminal
Case Review Commission and the Court of Appeal. The Review
should make any recommendations it sees fit, including actions
that may, in its view, be appropriate as a result of its findings.
The final report will be laid in the Libraries of both Houses upon
completion of the review.
F: Examine the historic and current governance and
whistleblowing controls in place at Post Office Ltd, identify any
relevant failings, and establish whether current controls are
now sufficient to ensure that failing leading to the issues
covered by this Inquiry do not happen again.
The Inquiry will consider only those matters set out in the
preceding sections A-F. The Inquiry will not consider any issue
which is outside the scope of the powers conferred upon the
Inquiry by the Inquiries Act 2005. The Horizon group damages
settlement (albeit the Inquiry may examine the events leading
to the settlement), and/or the engagement or findings of any
other supervisory or complaints mechanisms, including in the
public sector, are outside the Inquiry’s scope.
Annex B: What are the key differences between statutory and non-statutory
inquiries?
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Annex D: Indicative Inquiry Timetable
e June 2021: Publication of Protocol, followed by applications for Core Participant status
and recognition of legal representatives in accordance with the Protocol. Formulating
provisional list of issues.
e July 2021: Determination of Core Participant and Recognised Legal Representative
applications. Finalising provisional list of issues. Commencement date for making written
submissions about the provisional list.
« August 2021: Closing date for the making of Written Submissions on the provisional
List of Issues. Core Participants and others to disclose documents to the Inquiry.
« September 2021: Determination of the List of Issues (if necessary after oral
submissions). Training on the Document Management System for Core Participants.
Disclosure to begin.
« October 2021: Requests for witness statements made by the Inquiry (under Rule 9 of
the Rules and with s.21 Inquiries Act 2005 notices where required).
« November 2021: Witness statements to be provided to the Inquiry and disclosed. Any
necessary preliminary hearings.
e December 2021: Witnesses to be notified of whether they will be required to give oral
evidence and, if so, when.
e Early 2022 (either January or February): Oral Hearings of the Inquiry.
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