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IRH RJW JA JW telecon Jan 27 2014
IAN HENDERSON: ... explain a bit of background. All of
the people that we were dealing with when this all
kicked off almost sort of two years ago, pretty well
all of them are no longer at Post Office or are no
longer, sort of, involved. Post Office have
gradually, sort of, brought in a new senior team,
including a possibly temporary head of legal and
various other, sort of, senior people that we are
being asked to deal with.
The disadvantage of that is none of them know in
detail the origins of the work that we are doing and
the, you know, rather sort of painful birth that
gave rise to Second Sight being appointed and -- and
so on.
The reason I'm just mentioning all of that,
I think it in part explains why a few weeks ago we
were asked to sign a new letter of engagement
between Post Office and Second Sight. My reaction
to that was it was entirely inappropriate and it --
and it failed to recognise the fact that
historically we had 27 cases, with -- sought full
review by Second Sight, that derived from Members of
Parliament and a slightly smaller number directly
from the JFSA.
The current Post Office position is that all of
that work that resulted in our interim report last
July came to a finish at about that time and that
Second Sight's, sort of, sole responsibility now is
supporting the mediation scheme, which Post Office
believe has taken over completely from that
original, sort of, batch of work.
When we raised that as a question, it was
a complete surprise to them that we might be, sort
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of, taking that -- that point of view.
Unfortunately, one of the consequences of the
proposed sort of engagement letter is that Second
Sight is only allowed, in effect, to communicate
with the working group and has to follow its
instructions, and at the moment the proposed
engagement letter does not allow us to communicate
any information, even on the specific cases, the
original 26 cases, as far as MPs are concerned.
It's almost as if the MPs' sort of stakeholder sort
of angle has been erased from history, which frankly
came as a great surprise to us.
I have raised this a number of times with
Chris Aujard, who is now the head of legal at Post
Office. He was meant to loop back and clarify that
point with either Alice or Paula. I spoke to him
about an hour ago. He has been unable to do that.
So the -- the jury is still out on that point. But
that is quite clearly a major sort of obstacle
potentially to the scope of our work but most
certainly it inhibits our ability to communicate
freely and independently with MPs and, of course,
your office, James.
JAMES ARBUTHNOT: Yes. Well, that is a -- that is
a major issue, which obviously I'll discuss with
Paula and Alice tomorrow morning.
IAN HENDERSON: Yes.
JAMES ARBUTHNOT: Any other issues?
IAN HENDERSON: One of the perhaps more positive sort of
outcomes from the -- the interim report, and we only
found out about this a few weeks ago, is that as
a result of our interim report, Post Office -- and
I assume it was probably Susan Crichton --
commissioned an external review of POL's litigation
cases, and in particular the firm appointed was
a firm called Cartwright King, and in particular
they were asked to review prosecution. I don't know
in detail over what period, but principally from the
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point of view of was there adequate disclosure
particularly in the light of the arguably new
information that was brought to POL's attention in
the interim report.
We understand that 11 cases have been identified
where further disclosure has either now been made by
POL or is going to be made by POL as a result of the
work done by Second Sight. We don't know what the
consequences of that will be. In some cases it may
not be particularly significant, in other cases it
may be of great significance. But, again, I wanted
you to be aware of the fact that we have heard from
a rather circuitous route. I mean, it was let slip
in a face-to-face meeting rather than us being, sort
of, told officially about this, and I assume that
you probably also haven't been told about this,
which, again, might be surprising, bearing in mind,
you know, some of our earlier discussions.
JAMES ARBUTHNOT: Well, I haven't been told about this,
and that's of interest and may be important.
IAN HENDERSON: Yes.
RON WARMINGTON: lan, sorry to interrupt, there were also
IAN
the four or possibly five cases that were -- that
were pulled, as it were, as not being in the public
interest, in August of last year, and I'm not
sure -- you probably are -- whether that was 4 plus
11 or 4 plus 7.
HENDERSON: No, you're absolutely right, and -- and,
James, this is another point which may eventually be
quite significant as we get into the mediation
process in -- in more detail.
If you, sort of, stand back and look, on a scale
of, you know, sort of, one to 10, what cases are
going to have the greatest impact on the -- the,
sort of, Post Office, either by way of compensation
or in some other way, clearly cases where
a subpostmaster has been suspended at the beginning
of an investigation -- and a typical period of
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suspension seems to be anything from maybe six
months to 18 months. During that period they
probably lose their livelihood, they may well lose
their family home, and they will almost certainly
lose their -- their business.
As Ron alluded to, we were aware some time ago
of four cases where no evidence was -- was
subsequently, sort of, offered at trial. We heard
a few days ago of at least one further case where
a subpostmaster had been suspended for a lengthy
period without pay and effectively the post office
had shut down, and he was notified just a few days
ago that the Post Office is offering no evidence or
is not pursuing the, sort of, impossible
prosecution.
It strikes me that those are cases also that should
be on the radar scheme -- screen, rather, if only
because of the catastrophic and devastating impact on
the individuals concerned.
JAMES ARBUTHNOT: Yes. So do you personally have any
insight into how the mediations are going?
IAN HENDERSON: We are part of the working group. The
process, very briefly, is a subpostmaster has to
make an application. That application can be
rejected at that point. To be fair, however, the
majority have been accepted.
Once the application is accepted, they are
required, either with the help of a professional
adviser -- and the Post Office is paying
approximately £1,500 or so towards the cost of
a professional adviser -- to submit a detailed -- in
effect an extended application to the mediation
scheme.
Once that has been received, Post Office is
invited to prepare a response after Second Sight
has, sort of, completed its investigation into the
sort of issues raised by the subpostmaster.
RON
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At that point the intention is, and there is
a right of veto, the working group can decide that
the case does not merit, sort of, mediation, but at
the moment no cases have got to that point and,
frankly, I don't think we're expecting many to get
kicked out at that point. But it is only at that
point that the cases will go forward to formal
mediation.
One of the, we feel, unsatisfactory elements of
the way that the mediation scheme has been set up,
and this is potentially going to work in Post
Office's favour in terms of maybe covering up these
issues, there is no facility for reporting the
results of mediation to anyone other than the
parties involved, in other words the subpostmaster
and the Post Office. All the working group will
hear at the end of mediation is mediation was
successful or the mediation sort of failed to reach
a, you know, mutually acceptable sort of outcome.
For a whole range of reasons we think that is
unsatisfactory and potentially will enable, sort of,
Post Office to hide information from wider scrutiny.
So we're uncomfortable with that. We are raising
that at the next meeting of the working group.
WARMINGTON: Also, James, another aspect of your
question, and another answer, is that so far we've
had, of the 147 cases -- applications to the scheme,
a number of those have gone through to the stage
that Ian's described of having a professional
adviser appointed and producing a response, you
know, a sort of input to the mediation process.
We've had 48 of those. But of those 48 only four
are responded to as yet by Post Office, and
therefore we only have four that have completed the
process far enough for us to then prepare our
report, which -- which sits atop of those two other
components and gives our view on the merits of the
case made and the case refuted by the applicant and
the -- and by POL. So we haven't had a single case
go to mediation yet.
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JAMES ARBUTHNOT: The process is that the subpostmaster
puts in the application.
RON WARMINGTON: Yes.
JAMES ARBUTHNOT: It could be rejected but most have not
been rejected.
RON WARMINGTON: Yes.
JAMES ARBUTHNOT: Then the subpostmaster is required to
submit a detailed submission.
RON WARMINGTON: Yep.
JAMES ARBUTHNOT: Post Office is required then to submit
a reply.
RON WARMINGTON: Yep.
JAMES ARBUTHNOT: And at that stage you do your
investigation. With your investigation and those
two submissions that then goes to mediation.
RON WARMINGTON: That's correct. And there are some
other flurries of detail, for example, I mean --
IAN HENDERSON: Well -- just excuse me, there's one
important point to remember, that --
RON WARMINGTON: The PA.
IAN HENDERSON: -- at that point when Second Sight submit
its report, which sits on top of the detailed
application and the Post Office report, the working
group has the -- the right --
JAMES ARBUTHNOT: To kick it out.
IAN HENDERSON: To kick it out, yes.
JAMES ARBUTHNOT: But you think it's unlikely that that
would happen?
IAN
RON
IAN
RON
HENDERSON: I -- well, I would hope so. I mean,
they're all the -- we've got a superb chairman of --
of the working group, a former Lord Justice of
Appeal, Sir Anthony Hooper, who, all the signs are,
is doing an absolutely, sort of, excellent,
excellent job.
WARMINGTON: Yes.
HENDERSON: But until we get to that point, you know,
we can't predict exactly how it's all going to work.
WARMINGTON: And also, just for the sake of
precision, James, the incoming -- the first of those
reports, the applicant's case, as it were, is either
prepared by the applicant him or herself or, if
they've opted to go for a professional adviser, with
POL's financial input or support, that is a joint
effort between the applicant and the professional
adviser, and signed by the applicant, and then that
triggers -- kicks off the Post Office response to
that document.
Of the responses we've had so far, the four,
there's a big disparity in the quality of the
incoming professional adviser report, some of which
are extremely good, extremely well articulated, and
with as much evidence as they can muster, whereas at
the moment the responses from Post Office are pretty
weak.
I wouldn't like you to necessarily share that
yet with -- with Post Office, but they are -- they
are tending to respond along the lines of
saying: Yeah, we acknowledge that there were
circumstantial issues, you know, there were power
cuts, there were telecoms failures, this person did
have a lot of problems with scratchcards or ATMs,
but we -- not least because we don't have any
evidence now, we're not prepared to associate the
losses that were suffered by this person with those,
if you like, circumstantial issues, and therefore we
are refusing the claim.
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That is typically -- well, that's how they've
responded in all four cases so far.
JAMES ARBUTHNOT: Well, that then will go in front of the
mediator.
RON WARMINGTON: Yes.
JAMES ARBUTHNOT: But presumably --
RON WARMINGTON: Well, what POL -- what Post Office don't
yet know, but I think they suspect, is that our
report will not be terribly sympathetic to the fact
that the burden of proof is still expected by POL to
remain on the shoulders of the applicants, in spite
of the fact that POL itself had and destroyed the
necessary evidence.
JAMES ARBUTHNOT: What is -- what, in your view -- sorry,
I'm just trying to formulate this question.
IAN HENDERSON: Can I just say one other point in
relation to mediation?
JAMES ARBUTHNOT: By all means.
IAN HENDERSON: POL is only allocating either a half day
or a whole day to the mediation process. And of
course this is mediation rather than arbitration, it
is not binding on either party. It's down to the
skill of the mediator to the extent to which some
form of agreement may be reached. Our feeling is
that there is a huge gap in very many cases between
the position of the SPMR on the one hand and Post
Office on the other.
As part of the application process, we have
asked SPMRs to quantify the financial impact of the
issues that they -- they are raising and many of
those are quite substantial. I mean, typically six
figures in some cases. I think we have seen one or
two that are in the order of £3 million or £4
million.
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I am not anticipating that POL is going to, you
know, offer those sorts of sums by way of
compensation, so I can't help feeling that there is
a huge expectation gap between what SPMRs are
looking for and what POL is going to offer. But of
course we won't formally find out about that until
we get to mediation.
JAMES ARBUTHNOT: We have thought that when (unclear)
mediation is not binding -- we have thought that if
the subpostmasters didn't like the outcome they
would sue, but they didn't. But it strikes me, in
view of what you're saying -- let's suppose the
mediation finds in favour of the subpostmaster, it's
not binding presumably on the Post Office either.
IAN HENDERSON: Well, I'm not sure it's even correct to
say that mediation will find in favour or one side
or the other. My understanding of, sort of,
mediation is -- you know, the objective is to find,
sort of, common ground and try and find an outcome
that is acceptable to -- to both parties. I mean,
the mediator may well, you know, use quite strong
language to indicate to Post Office that, you know,
he thinks that they should contribute, you know, in
possibly quite a substantial sort of sum, but by the
very nature of mediation, Post Office is perfectly
entitled to make up its own mind on the matter. And
I'm afraid all the signs are -- that we're saying is
that they, you know, are not of a mind to make
a substantial contribution in these circumstances.
JAMES ARBUTHNOT: Well, it seems to me that that's
a question I need to ask tomorrow.
IAN HENDERSON: Yes. I think it's -- I mean, we have
asked that question and have been, sort of,
somewhat, sort of, stonewalled: "You know, we will
have to see, it will depend on the circumstances" --
JAMES ARBUTHNOT: That's what they will say to me, but
nevertheless --
IAN HENDERSON: Yes. No, you will have more clout than
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we have had, and hopefully will have more luck.
The other point just to, sort of, tuck away is
I raised the question the other day, bearing in mind
the fact that this has been going on for a couple of
years, what contingent liabilities is going to be
disclosed in the Post Office's annual accounts and
reports for the mediation process or, indeed, for
the potential, sort of, litigation? We know that we
have got Shoosmiths waiting in the wings. Cases
that fail mediation will have the advantage of being
able to use at least some of the information that
has come to light as part of the mediation process,
and I think it is clear as night follows day that
there are a large number of potential, sort of,
litigants who will not hesitate in moving this
forward if mediation fails.
JAMES ARBUTHNOT: Yes.
RON
IAN
WARMINGTON: Yes. And Ian, I mean, I -- bearing in
mind what you said right at the beginning of this
conversation, about the turnover in staff -- and, in
fact, about the only person of any seniority and
competence that has been around from the outset but
is not much involved now, seemingly, is Angela,
Angela van den Bogerd. I think she's probably got
other fish to fry at the moment. The -- I don't
know anybody other than her who could represent --
who could realistically represent Post Office in any
mediation meeting, let alone all of them, who would
have the decision-making authority to make a decent
offer.
HENDERSON: Well, of course, it's not so much the
individual, Ron, it's what they're authorised to do
and what they've been briefed by the board. I'm
afraid that all the signs are that the board of the
Post Office just want to wave a magic wand at no
cost and make this whole mess go away, which I think
is a very unrealistic way of viewing the whole
thing. But that seems to be the way that the board
is approaching this at the moment.
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JAMES ARBUTHNOT: The question of whether there is at the
RON
mediations a person with sufficient decision-making
authority --
WARMINGTON: Exactly.
JAMES ARBUTHNOT: -- to agree that a particular decision
IAN
RON
IAN
RON
IAN
RON
can be made is, again, an important one, which I can
ask Paula and Alice tomorrow.
HENDERSON: Yes. And also, sort of, what
constraints, if any, will apply to that person. You
know, are they allowed to negotiate offers up to,
say, £5,000 or something like that? In other words,
will the board be imposing a limit on their
authority?
WARMINGTON: It's completely -- also, it's completely
foreign given that -- I can imagine the person would
think it's massively above their pay grade, in the
sense of, you know, "Here am I trying to make
a decision whether or not my company pays out
£3 million."
HENDERSON: If that's case, there's no point in going
in to the mediation --
WARMINGTON: No, I couldn't agree more, Ian.
HENDERSON: -- if you're not able to mediate on
a proper basis.
WARMINGTON: Yes.
JAMES ARBUTHNOT: Okay. I have remembered what it was
IAN
that I wanted to ask before. What is the
consequence or what would be the consequence if you
failed to sign this new letter?
HENDERSON: Well, firstly, POL have been trying to
impose this on us. At one point there was a clause in
the letter that said something like "If you don't sign
this letter we will regard you as being bound by its
terms if you continue to act", which to my mind sounds
RON
IAN
RON
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rather like holding a gun to our heads.
WARMINGTON: Specifically -- and I found this --
I told them I found this offensive and bullying:
"Tf we do not receive a signed copy of this
letter but you continue to carry out any of the
services, you are deemed to have accepted the terms
of this letter."
That's what it said.
HENDERSON: Yes. Which was pretty unattractive and
I made that point to their general counsel, who
has -- you know, at the moment he's agreed to remove
that, but at the same time we're no further forward
in terms of -- of reaching an acceptable sort of
outcome or even a sort of a compromise that we feel
protects Second Sight's position, and in particular
our ability to report -- well, both to investigate
and report without the -- the -- you know, the sort
of -- the scope of that report being controlled by
the Post Office. All the working group.
I mean, their latest tactic seems to be to -- to
tie us to the working group and -- and to hide
behind the working group as, sort of, controlling
what we do and what we say. Which we have said very
firmly is in breach of the undertakings given both
to, sort of, Second Sight and -- and probably, sort
of, MPs and yourself, bearing in mind the emphasis
on the independent nature of the work that
Second Sight has been doing.
WARMINGTON: I might add, James and Janet, Ian, as
ever, is being very calm and collected and rational
about this. I was incandescent when I first had
bowled at me the engagement letter, which included
such gems as the following being outside our scope:
"For the avoidance of doubt, the services do not
include ..."
And one of the items it did not include was
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rendering a report or opinion on the general
suitability or integrity of the Horizon System. And
for that matter, definitely not opining on any
settlement that has been or could have been reached
between Post Office and a subpostmaster or anything
related to the contract or anything relating to the
efficacy or safety of any criminal investigation,
prosecution or conviction of a subpostmaster.
So all those were outside scope on the original
version of this, which Ian was much more calmer --
must more calm in handling than I was.
JAMES ARBUTHNOT: My next question is, do they still owe
RON
IAN
you any money?
WARMINGTON: No, actually. They lost three of our
invoices but -- but are pretty well up to date.
And -- as I say, Ian has been making very solid
progress in trying to get that.
But getting back to your original question,
I had made it clear to Ian, who was the calm face of
Second Sight in dealing with this, that I was
prepared to down tools and was simply not going to
sign a document like the first version.
We're getting close now -- by the way, I had
made the point that I was -- I felt it was
underhanded to put that in front of us without being
prepared to put it in front of the working group.
We've now got to a situation where they will be
prepared to put the new version in front of the
working group but it's been a pretty hard fought
battle to get to something like that.
HENDERSON: Ron, I think the point to make there is
that I certainly am very, sort of, concerned about
the way that they are moving this forward.
If I can just sort of step back slightly, the
way that I see our role, we were originally
appointed to conduct a completely independent
investigation as a result of very serious matters
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that were brought to the attention of a number of
Members of Parliament. Following our interim report
in June/July last year, Post Office came up with
a proposal for mediation and for the last few months
that's what we've been primarily, sort of, working
on. My view is that mediation is in addition to --
RON WARMINGTON: Yes.
IAN HENDERSON: -- the original scope of our work. We
have only issued an interim report.
I think the intention of MPs was: well, let's,
you know, see how Post Office, sort of, moves this
forward. We'll give them the benefit of the doubt.
By all means if they want to, sort of, you know,
carry through with mediation, that seems a perfectly
reasonable sort of way forward.
But I see that as in no way replacing the
original sort of work that we did, which of course
is only, sort of, partially complete.
As far as the Post Office is concerned, our
interim report was the last report that the public
or MPs is ever going to hear from Second Sight, and
they are in effect trying to emasculate us and close
us down through the mechanism of the -- the
mediation scheme.
JAMES ARBUTHNOT: Okay, yeah.
That's all extremely helpful. From my point of
view it gives me a pretty clear idea of where we
are. I will have a word with Alan Bates this
afternoon and then with Paula and Alice tomorrow
morning.
IAN HENDERSON: Yeah.
RON WARMINGTON: Ian, is it premature to --
IAN HENDERSON: For your information, we have
a face-to-face meeting with the working group on
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Thursday, and I imagine that one of the matters to
be raised, possibly under "any other business" may
well be the -- the proposed, sort of, engagement
letter. So it would be useful to at least have some
feedback from your meeting, James, at some point
maybe, you know, late tomorrow.
JAMES ARBUTHNOT: Yeah, okay. Well, we'll do our best.
I see that -- there may be things that they try
to tell us in confidence. I will try to avoid that
because -- I think I need to say at the beginning
that we need this process to be as open as possible.
IAN HENDERSON: Yes.
JAMES ARBUTHNOT: Because anything less, the Members of
Parliament would find unsatisfactory and
unacceptable. It's all been before Parliament
already.
IAN HENDERSON: Yes. Just one last point, and I perhaps
should have mentioned this earlier, Alan Bates was
kind enough to disclose to us a copy of a letter
from the Minister of BEIS to him, I think it was --
was it September last year, Ron?
RON WARMINGTON: Yeah, yeah, I've got it here.
IAN HENDERSON: Where it was pretty clear how BEIS and,
therefore, presumably, sort of, Parliament saw the
relationship with Second Sight. I don't know
whether Post Office was aware of that letter at the
time. It's certainly something that I mentioned
a few weeks ago and they are now aware of it, but it
does strike me that everything that they are doing
at the moment is completely contrary certainly to
the spirit if not the letter of that communication
between the minister and Alan Bates.
RON WARMINGTON: Yes, it was 22nd September from -- to
Alan from Jo Swinson, and it included the line:
"I have noted your concerns about the mediation
scheme and the work of Second Sight being funded by
POL and the potential, therefore, for their
independence to be questioned, but it is important
to be clear that Second Sight are not employed by
POL."
Right. Now, the problem is she doesn't go on to
say who Second Sight is employed by and, of course,
POL's position is that they are paying the piper.
JAMES ARBUTHNOT: Janet tells me that we have a copy of
that.
RON WARMINGTON: Yes.
JAMES ARBUTHNOT: So we can try to (inaudible).
IAN HENDERSON: Super.
RON WARMINGTON: The only other thing, Ian --
IAN HENDERSON: Anything else we can help you with before
tomorrow, James?
JAMES ARBUTHNOT: JI don't think so, thank you, that's
extremely helpful already.
RON WARMINGTON: lan, one last thing, generic report or
is it too early to --
IAN HENDERSON: No, I think we'll leave that for the
moment, Ron.
RON WARMINGTON: Okay.
IAN HENDERSON: I think we need to keep this at a fairly
sort of high level.
RON WARMINGTON: Yes.
JAMES ARBUTHNOT: Okay.
IAN HENDERSON: Super. Thanks. Okay, many thanks,
everyone.
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RON WARMINGTON: Bye.
(Call ended)
(Recording ends)