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Post Office audio file 13018
(Off the record conversation about holidays)
FEMALE SPEAKER 1: Thank you very much for coming in.
(interference). Taking them in order to the points we
are needing to cover. Can I just give you my thoughts?
(interference). We obviously met James, as you know,
and we offered him, Alice and I, that we should have
an interim meeting with the MPs. I thought it was
important that you understood we had done that rather
than he having insisted. I think that's because -- the
reason that's important is because where we started this
whole process was about us being transparent
[overspeaking] showing people where we have got to.
What I wanted to talk about is how we should
handle that because one of the commitments we made to
each other when we spoke before was that (interference)
in the past. I want to make sure that we are still on
that page. So how we would handle that with the MPs.
Another one is I think is he mentioned to me that
you had some concerns about the letter of engagement and
if there are things I can do to help unlock that, then
let's (inaudible) that up as well.
A third one for me is, I guess for a couple of
months now related to the letter of engagement, the
shareholder executive are asking us about timescales and
budgets and I'm a bit stuck on this, to be frank. Cards
on the table, when we went into this we thought we would
probably have it finished by March, maybe June
(inaudible) to March, then extended it to June. The way
it is running at the minute, it looks like it will be
much longer than that.
Without going into all the detail and we are very
happy to do that, it is going to cost a minimum of 5
million just on the administration where we are today.
Your fees, with the adviser fees, with the increased
resources (interference) .
So I think -- and I'm not sure (interference) not
just the cost issue but actually timing, because I think
it is in the interests of the cases, the postmasters are
going through the (inaudible) finish it with them as
soon as we can. (interference). And my worry is that
(inaudible) I gather there is three, so it is two or
three, we have now got a team of 22 people working
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through the investigation of this size so that we can
get into the pipeline of (interference).
IAN: On that point, are you aware that the Working Group
specifically discussed the timetable and when the
Working Group feels that the project will be complete?
That came out at the last meeting.
MALE SPEAKER 3: (inaudible) before because I was present on
the phone.
IAN: The thinking at the minute, and to be fair there
wasn't an awful lot of discussion, it was just to a
certain extent lick your finger and stick it in the air,
but the Working Group were working to the assumption
that it is going to be wrapped up by the end of this
year.
MALE SPEAKER 3: I think we --
RON: October, wasn't it?
FEMALE SPEAKER 1: I was going to say October -- I think my
question though is how? How is that possible?
IAN: One of the unknowns at the moment is clearly the
mediation process. When we first kicked this off we
were told that mediators could be available at
relatively short notice. That seems to have sort of
slipped, but I think there are some administrative steps
that we can do. I mean, for example, we have had out of
the 147 applications (interference) kicked out, we have
had 60 what we call CORs, case questionnaire responses
which are the final sort of input from the subpostmaster
and their adviser.
There's obviously still more to come, but all of
those CQRs are being processed by Angela's extended team
at the moment. We have had five POL reports so far
which is the output from the internal POL investigation.
And we are now sort of dealing with sort of our response
to those two inputs because, again, the Working Group
agreed that our report would sit above the COR from the
subpostmaster or their adviser and the POL report and it
is very much being produced on a sort of compare and
contrast basis and Chris, I think you came up very
helpfully with some suggestions in terms of identifying
sort of issues of common ground, issues where there is
disagreement and then, where there is evidence that
helps sort of resolve those issues, that's the main sort
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of focus of Second Sight.
What we have decided to do is, they are sort of
common themes across many of the cases. And where
matters are unique to a particular subpostmaster, that
is going to be dealt with within the individual report
from Second Sight that sits above the POL report and the
COR. Where we have identified common issues that relate
to multiple applications, those issues are going to be
dealt with within what we are calling the thematic
report, which ties in with --
FEMALE SPEAKER 1: Building on the interim report --
RON:
IAN:
RON:
Which Chris called the generic (interference).
The MPs tend to refer to it as thematic issues and the
thematic report. We think it is a sort of more neutral
and in some ways more appropriate --
Of course Alan tries to drag it back to systemic, we
are saying that is a much heavier, stronger word that
implies right across the board. So we are very careful
about using the word systemic.
IAN: And pejorative as well.
So we are currently working on the individual sort
of reports based on the investigation by POL and at the
same time working on the thematic issues report. The
one slight problem or something that we should not lose
sight of is the thematic issues report, to a certain
extent, is going to be a living document. You know we
have only had five reports from POL so far. As more
reports flow through the system, it is likely that we
will wish to update the thematic issues report so there
may well be a number of versions of them.
FEMALE SPEAKER 1: So I understand that, let me break that
RON:
down because my question, which I have got to go back to
the shareholders with and there is a board meeting as
well this week, is will we do it by October? So,
I understand there were delays on our side and some
delays on your side and the Working Group gave both
parties extensions and we are now set up to, I think
generate five a week or something like that on that
basis.
I think (inaudible) is due on the 27th of this month.
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FEMALE SPEAKER 1: (inaudible) I just don't understand how
we are going to get through that timescale if also, at
the same time, we have got the generic thematic systemic
report.
IAN: The reason I think we are fairly --
FEMALE SPEAKER 1: Does that help?
IAN: It does help because when we identify the unique
issues, it is a matter of almost putting those into sort
of pigeon holes and the incremental sort of work for us
is reduced. This again is partly the thinking behind
this thematic issues report that is going to sit above
all the work that we do. We think the turn around time
for the individual reports is -- well, it is certainly
speeding up and we are finding that already and at the
moment we are fairly sort of confident --
FEMALE SPEAKER 1: (interference). I don't want you to try
and reassure me. I need to know if there are real
issues.
IAN: October is not realistic in my view.
RON: One way of looking at it [overspeaking].
FEMALE SPEAKER 1: If you take 5 reports a week, even with
a generic themes, you are still going to have to
(interference) which -- and if you are saying it is a
living document as well (inaudible). I don't see how we
are going to finish this in 18 months, let alone a year
to be frank. And I'm not sure that I can go back to the
(interference) I don't think they will accept it.
IAN: Looking at the critical path at the moment, I see the
main blockage being mediation. Our thinking at the
moment is we need to pre-load some of the mediation even
to the extent of booking (interference) and reserving
individual sort of mediators.
FEMALE SPEAKER 1: Why is that a problem?
IAN: Because mediators tend to be booked up anything up to
sort of two, three, four months in advance. So if we
approach them now --
MALE SPEAKER 3: -- 8 weeks to give notice.
IAN: What will help is by prebooking possibly a small
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number to start with, so that we can actually bring the
date of the mediation much closer to the point where we
release the Second Sight report.
FEMALE SPEAKER 1: If you took a theoretical picture of
where you are currently, the reports you are likely to
go through, if they follow what you might expect, let's
say you agree that it goes back to the Working Group and
they go on to mediation, you have got two reports due
out next week, is that right?
RON: We are aiming for at least two this week.
FEMALE SPEAKER 1: They would go to the Working Group for
say a week to review them, then they say, yes, they
should go to mediation.
RON: Yes.
FEMALE SPEAKER 1: What would therefore be the earliest when
they could go to mediation?
IAN: This is when mediation is on the critical path because
at the moment, as I understand it, we have not prebooked
or reserved any mediators and because of that there is
going to be almost an inevitable two-month gap.
FEMALE SPEAKER 1: Why is that (inaudible).
MALE SPEAKER 3: I know two or three reasons. The cost
issue obviously. And there is also an issue of taking
them as they come, and the timescales, as we agreed with
the Working Group, were both structure set up so
(inaudible) come through and once they are through the
process, we then know whether or not (interference)
comes through and the recommendation is not to mediate
or, indeed, if you get to a point where (inaudible)
simple solution that does not require mediation. So we
would rather take the whole process a step at a time.
Your point about bringing forward the mediation,
at one level will serve to compress the timetable, but
in the overall scheme of things will only ever bring the
end date forward by 8 weeks. If you think about it
logically. All we are doing is bringing the end day
forward by 8 weeks, which could be beneficial but it
doesn't get away from the point that there is a sort of
gate through which everything must flow, which is
effectively the two or three of you. And if we are
throwing at you one a day, one of the concerns I
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discussed with you is, how are you going to be able to
process that one a day and turn around quickly enough,
so that you adapt your thematic report and you do the
applicant justice? In fairness to the applicant.
[overspeaking].
RON: Let me take you through the process very, very
succinctly. The first thing we see from an applicant
[overspeaking].
MALE SPEAKER 3: It is very warm in here.
IAN: There is one other question, how long have we got just
so we manage our time with you?
MALE SPEAKER 3: About an hour. I have an hour in my diary.
It says hold for an hour.
RON: This won't take long. The first thing we see is
either a COR prepared by the applicant, or a
contribution by that applicant to that applicant's
chosen professional adviser. The professional adviser
reports, the CORs, vary in size, complexity and quality,
frankly, from a scale of 0 to 10, 1 through to 9. They
vary in size. We had several in last week that varied
from two pages prepared by the applicant herself and the
largest was 373 pages prepared by -- so in all there
were 800 pages of input.
Some of it was quite (interference) things like
that. Our assessment, and that's when Paul became
seriously concerned, was to say: hang on a minute, if we
then wait for POL's response, which is typically
20 pages with 50 pages of attachments, if we then try to
review all that in one go, which is efficient in terms
of focusing on that case on that amount of time, it is
going to take three days for each case. Three days
(interference) up to three month's work. We came to
that conclusion ages ago, which is one of the reasons we
got Chris in.
But what -- as Ian has alluded to -- we have found
is, by writing up -- which we have done but is in the
editing process -- the generic issues and by using
a mechanised process in a sense saying: we know the
thematic issues a person first raised; they raised six,
which ones we know. Which new points got raised in the
COR? Another two. What did POL do? They answered all
the eight or they left one out, (inaudible) and then
they might have added two more, as sometimes happens.
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We now know exactly which points we are dealing with and
the whole of the approach (interference) we know this
person raised the ATM issue (interference) second. We
know we have addressed that, we have written it up. So
now we will just write key specific things. Can we
bring that down to one day's work for each case?
Probably not. It wouldn't do it justice and some cases
are (interference) and quite complicated.
FEMALE SPEAKER 1: (inaudible).
IAN:
I think what we are hoping --
FEMALE SPEAKER 1: To do this COR vetting [overspeaking].
RON:
IAN:
What we have done is, in terms of efficiency, we
certainly lose somewhat some aspect of efficiency. When
those CQRs come in, like these ones, what we are now
doing -- whereas before we were, that's interesting,
double line, highlight. What we are now doing is
marking up the specific issues and then getting back to
the professional adviser and giving them a week to talk
to the applicant or both and saying: look, this thing is
not clear. So that we then harden off that COR before
it goes to the Working Group.
That investment of time is useful. Obviously it
can be very complicated because you can't necessarily
remember going through something 103 cases ago. We can
probably keep 60 cases in our mind, we are trained to do
that.
So that new process means that right now we are
reviewing this stuff that's coming in as well as
producing the reports. That will have to continue. So
we are looking at the reports coming in, then we look at
that report again in conjunction with the Post Office
response report. And that's when we produce our report.
Are we concerned we don't become an awful bottleneck?
Of course. But adding -- without trying to exaggerate,
getting in the know on how this all fits together, is
not an overnight job. So we can and are bringing Chris
up to speed, subject only to signing the confidentiality
agreement and releasing the stuff to him. But for Chris
to be able to take the two incoming components, CQR and
POL report and produce a fresh report, we have not
thought that through yet. We don't think that's going
to work for a while.
(inaudible) .
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RON: We are where we are. Even if we had been PwC -- and
I can call for fully trained investigators from other
firms that we have worked with and have relationships
with --
IAN: I think it will be a lot clearer after the next
meeting with the Working Group because the plan is, at
that meeting, which is 7 March?
RON: Yes, Friday.
IAN: They will have seen at least two, possibly four of our
draft reports and they have asked to see them in draft
before their finalised [overspeaking]. They will also
see the first draft of the thematic sort of issues
report and what is quite important is the feedback from
the Working Group because in terms of what the Working
Group is asking us to do, we have ranged from a very
short report based almost on the format that we adopted
for the Spot reviews, which actually worked very well.
The feedback from Tony however was -- and this reflects
his judicial appointments and so on -- is that he would
prefer a longer --
MALE SPEAKER 3: (inaudible).
IAN: -- and more descriptive report. I suspect we are
going to end up somewhere in the middle. Clearly, in
the same way that there are common issues, there are
common facts as well. For example, all applicants that
are referring to issues that occurred more than 7 years
ago, the likelihood is there is actually relatively
little new evidence or even sort of available evidence.
And Tony himself in the Working Group has said: when
this goes to mediation, it is going to be horse trading.
The subpostmaster will present their case --
FEMALE SPEAKER 1: How many fall into that category?
Presumably you have a sense, how many fall into that
category because if they do, presumably, there is
a different approach?
IAN: That's what we are looking at. We have not analysed
that. It is probably 40%.
RON: It was a minimum of 20 and probably 40.
MALE SPEAKER 3: 30.
IAN: Some of them are going to be much easier to process,
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if only for those reasons. In other cases, the SPMR's
case is so badly presented it is very difficult to get a
grip --
FEMALE SPEAKER 1: Sorry to cut across you, have you looked
at all the cases that have come in? Do you have a sense
as to how many themes you have got to and whether they
fit into those themes?
IAN: The short answer is, yes. We are finding --
FEMALE SPEAKER 1: You have a top level view as to where
this 140 fit roughly?
IAN: Yes. What I was looking at right at the beginning,
I will show you on a small screen --
RON: I have a copy. What we did right at the outset
(interference). We took all the cases -- we submit this
every week at the meeting. (inaudible). Then this is
the thematic column notes. We know by adding those up
that 21 people have raised that theme -- sorry 61 have
come in; 46 have been sent to Post Office; 5 have been
responded to; 24 have come up with that issue; the
minimum is on things like motor vehicle licences
(interference) .
There is a question whether that is a thematic
issue. Clearly training and support gets multiple
listed. Then as we get more into the CORs
(interference) .
FEMALE SPEAKER 1: So this is done as a result of the
initial responses?
RON: Yes.
FEMALE SPEAKER 1: Then you further qualify it once you have
gone through the CQR?
RON: Exactly. That tells us the thematic score. Clearly
our thematic report has a combination of all of those,
save the ones where (interference) put something in
a motor vehicle (interference).
MALE SPEAKER 3: It is a very (inaudible) process.
Certainly my concern for a while has been the amount of
effort and time to process everything that we are
throwing -- I know how much work goes in on our side. I
see a lot of the stuff that you don't see, I mean the
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IAN:
RON:
IAN:
working documents. The amount of work in producing this
analysis (inaudible) on these things, that's taking each
person quite a number of days just on one case. Then
actually to reverse engineer that and understand what's
being said, what the differences are, what is the
analogy, the theme, if the facts are subtly different,
even that just strikes me as (inaudible). Three of you
(inaudible).
We approach it from a slightly different perspective.
One of the things that I tend to do is start at the end
point. What are we trying to achieve? Certainly the
question, is this appropriate for mediation? If the
answer to that is, yes, what are the issues that are
particularly relevant to the mediator? And that is
where it is so helpful to separate out issues, sort of,
where there is common ground; identify the disputed
items and then in relation to the disputed items,
identify what evidence or not is available.
To a certain extent our role is slightly
simplified by all the work that has been done
previously. We are very much putting ourselves in the
shoes of the mediator and trying to ask that question as
the mediator, what do I need to --
Writing our reports is -- to be crystal clear --
brevity is slightly less important than clarity. We
don't write terribly long reports but they will need to
-- can be read in one pass. Whereas, typically, you
have to read a COR prepared by an individual applicant,
and on reading it and full of absolute nonsense
(interference) £20,000 of cheques were missing on
such-and-such a date and it was POL's fault. Well, tell
us more. You have to keep going over it, the same
again, and again. It takes twenty times to read
every -- it might be three pages, but it will take you
60 pages worth of reading to understand it.
One thing I think you need to be aware of, this ties
in with your transparency point, something we are seeing
time and time again is tangible evidence that the
subpostmaster raised one or two more sort of issues, got
either a limited amount of support or in some cases no
support in terms of resolving those issues. But what is
a very common feature over a number of the cases that we
are looking at is that there was not closure. In other
words, the initial sort of question or query that was
raised by the subpostmaster, was not satisfactorily
resolved by the support that was provided and therefore
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the default position is, under the contract between the
subpostmaster and the Post Office, the subpostmaster is
responsible for those losses. It is that scenario that
we are seeing time and time again that is sort of coming
up.
FEMALE SPEAKER 1: That's useful and we know that. That's
IAN:
why we are putting all these other changes in place. To
come back to the purpose of the mediation scheme; it was
to try and reach some resolution and acknowledge that.
We are not disputing that, I have never disputed it,
that is the reason it was put in place. We are not
going to be defensive about that at all because we are
changing the way we do this stuff.
But whether you put aside the 40 or so that were
prosecuted, because in a sense -- my sense from -- I had
one conversation with Toney last year, (interference)
process --
Yes very much so.
FEMALE SPEAKER 1: But that still leaves 100, where we
IAN:
probably need to apologise and there maybe 40% of those
where they are over 7 years old and we don't have
a record and it will have to be an apology and a token
gesture of some sort.
But my worry around this is that it just --
listening to you, I don't see how we can get it done by
October. The level of claims that are coming in is
nothing to do with an apology and a kind of low level
(inaudible), it is up £100 million. You know? I have
got to go to the shareholders executive this week and
tell them it is 100 million.
I'm kind of in a situation where I am not quite
sure how to find a way through this at the moment.
I wonder is there anything in terms of resetting the
dial on this thing in some way; looking at the themes
and dealing with the whole thing at a generic level?
One thing that worried for me some time, you may
remember Chris it was one of the things that I said to
you when you came on, the elephant in the room is the
expectation gap between subpostmasters and Post Office.
It may be possible to sort of bridge that using skilled
mediators. Unfortunately, at the moment, we don't even
know the quality or in some cases even the identity of
the mediation panel.
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Again, Chris, you may want to look at that and
have discussions with CEDR who are the organisation
providing --
MALE SPEAKER 3: We had those discussions as part of the
IAN:
process in setting them up. That doesn't detract from
the point that there are two sides (inaudible) in the
room. From my perspective (inaudible) Post Office
(inaudible). But the initial conversations I heard
around the table were (inaudible) face to face, were the
mediation scheme and it was set up because people had
actual or perceived injustices in the past and we were
trying to get parties together and an apology. It felt
to me at the time the mood was very much around a
gratuitous payment of some sort. Not millions of pounds
but you know thousands of pounds maybe, but a contained
amount. That was the sense I sort of got from you and
the JFSA and others. Sort of rapidly over the course of
the build up to Christmas, we started to see things come
in where the level of claims went up and up and up and
almost felt a bit like a spiral where people are just
putting in -- I don't know if this is true or not.
And there is certainly some applications that we
believe --
MALE SPEAKER 3: I'm being totally --
IAN:
It is fine. It is helpful to have this discussion.
There are some applications that we feel are purely
speculative. It is people jumping on the band wagon
raising issues now that they have not raised at any time
during the last five years in some cases. And I'm
reasonably confident the mediator will be able to see
those off in an appropriate fashion.
But the toughest category of case, I feel, are
cases where there has been the early stages of criminal
prosecution, certainly sort of criminal investigation
and this is driven by what appears to be POL policy.
You know, to immediately and almost automatically
suspend an individual and of course that has huge
financial consequences because the practicalities of
that usually mean they lose their business. In many
cases they have been sort of made bankrupt and I don't
know what the current numbers are, but we are certainly
aware of a number of cases where the POL criminal
investigation has been underway for, in some cases,
quite a longe time and then, at some point, the decision
is made to discontinue that potential prosecution. But
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RON:
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of course by then it is too late.
Now, those cases I think you could quite
legitimately see a very large financial sort of impact.
Because of the devastating impact of the decision to
suspend and effectively separate the subpostmaster from
his livelihood and --
We even had cases where the individual has
(interference) to get a police investigation
(interference) where they suspended that their
(inaudible) mysterious shortfall, that occurred over
many, many months. So they obviously start to
suspect -- triggered sometimes by POL's investigation
team's input that it had to be (inaudible). It follows
that they assume that one of their staff have. They go
to the police and I think in three instances we have
seen of what is (interference) a refusal by POL to
(interference). No, we have got our own investigation,
we will investigate it. And two instances where the
police reported that POL was not prepared to co-operate
with their own investigation. So that left the person
devoid -- left the SPMR suspicious that one of the staff
had (inaudible) the problem, devoid of any investigation
either by the police or by POL. That's the sort of
thing that Ian is referring to.
FEMALE SPEAKER 1: Those sorts of cases though are not the
IAN:
kind of thing that mediation is ever going to settle
because if that subpostmaster felt so strongly about
that (inaudible), then one would imagine that they would
need to take some sort of legal action on that.
So what I'm concerned about is appearing things
that are stretching the scope in a sense of what
mediation can do, or stretching the original intention
which was around the support and the training on the
back of it and if there are a small number of cases like
that, what we can't do is allow those to derail the
whole process and stretch it out further. I'm not sure
I'm hearing anything that's going to help us --
Manage it internally.
FEMALE SPEAKER 1: Yes.
MALE SPEAKER 3: The flip side of that is the worst possible
outcome is, with the best intentions of the world to get
a fair outcome for the subpostmasters, and it is
derailed because of the (inaudible) cases.
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Three or four months ago I did some back of the
cigarette packet calculations based on the fact we had
had the initial applications, we had not had many
(interference). The ballpark figure I came up with,
because bearing in mind one of the objectives was to
really achieve closure and finality for both Post Office
and these individuals. The sort of figure that I felt
might be appropriate was between 25 and £50 million.
And that was the sort of number that I felt the Post
Office may need to consider if it wants to sort of close
these issues down.
Looking at it from the other perspective, what we
are being sort of told, and we are seeing this in some
of the documents that we have seen and so on, applicants
are using the mediation process in part as
an opportunity to get further sort of insight and,
frankly, evidence and we know a number are lining
themselves up almost for failure because they do not
believe that the Post Office is serious about reaching
closure and they are going to use the mediation
process --
MALE SPEAKER 3: (inaudible) so extreme --
RON:
IAN:
RON:
IAN:
And we have heard cases right across the spectrum. In
other words, you have cases that, without any doubt, a
sort of grown up conversation, without any financial
compensation, is going to resolve it for sure. There
are some like that. One questions why --
And there are others where the numbers are relatively
small.
Something around that number, not many. Then there
are others where a suicide is involved or a business
collapse is involved, where even if the core reason is
(interference), the person or the staff of that
subpostmaster made a series of -- systematically made
mistakes, that they now feel should have been detected
earlier by them or by POL and (interference) either the
system (interference) training to make sure that they or
the staff made that mistake again.
(interference) focus on training. (inaudible)
training is not the issue here. What is perhaps much
more significant is timely and effective support when
a subpostmaster has a problem. All the signs are that
the initial training that it provided is perfectly
adequate in terms of the subpostmaster sort of starting
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the job and running a Post Office. Where things start
going wrong seems to be many weeks and in some cases
months or years later, when they have a particular
problem. It is the failure to respond in a sort of
timely and effective manner to those problems that seems
to be the real issue.
FEMALE SPEAKER 1: I'm sorry, I'm just aware (inaudible).
Just coming back to -- so we entered this
(interference). We are now saying it looks -- the
ambition is October. We are all saying that is going to
be impossible. That's useful to know. The cost is
already running at more than we can afford. The
compensation is completely out of court, in terms of
what the shareholders are ever going to agree to.
My biggest worry I guess for you in a sense is --
those are problems the Post Office has to deal with --
is your ability to get through the workload and I still
haven't heard anything that tells me that you are going
to be able to get through this by when. Could we give
you additional resources to help you do that? Can you
think of (interference) approach that would change the
way we go through the scheme in some way? We need to go
back to the drawing board.
IAN: The thing that will make the biggest difference is the
Working Group because of course under the new proposed
terms of reference and so on, it is the Working Group
who, to a certain extent, is directing the work we do
and what our output is. The thing that would be the
greatest help is for the Working Group to accept
a simplified report from us, where it is more in the
style of the sort of reports that we did at the Spot
review stage and we may get an answer to that as early
as next week.
FEMALE SPEAKER 1: They are likely to say no, Ian, aren't
they? It is not in their interest to say yes.
RON: Tony used the phrase: oh no, I'm looking for a much
longer report than that or words to that effect in one
of the meetings, which slightly rattled us.
MALE SPEAKER 3: Yes, we had been heading in the direction
of a small (inaudible).
IAN: If you think about it and put yourself in the
potential shoes of a mediator and one of my suggestions
that was not accepted by the Working Group was, can we
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get a mediator in and actually do a desktop exercise
where we actually sort of run through maybe even a sort
of a live case of -- a real case and see if we can
narrow down what are the key issues that the mediator
wants to do or needs to have, just to sort of make sure
that we aren't spending our time on stuff that is
potentially adding very little sort of value? I still
think an exercise like that --
FEMALE SPEAKER 1: Kind of a dry run.
RON:
The only input we have had on that is that Kay is CEDR
approved. This is one of the mediators on the panel of
the company that is over seeing this. [overspeaking]
FEMALE SPEAKER 1: What's her view?
RON:
Her view is that a thematic report as a back up and
therefore the mediator would pre-read it first, to have
available the glossary Angela has produced, plus our
report, plus the POL report and the CQR and would be
able to -- and the thematic report -- and would probably
read the thematic report first to get an understanding
what's going on here. Then perhaps glance at our
report, then go through the other ones in more detail
then come back to our report.
MALE SPEAKER 3: (inaudible).
RON:
IAN:
Yes. But there's only so much point in making life
easy for the mediator and messing up the work flow. In
order to do that, our audience for that is one person at
that stage.
I think there is a huge risk that we do more than is
needed because at the moment we are not paying
sufficient attention to what is the core material that
the mediator needs in order to do what Tony called this
horse trading.
MALE SPEAKER 3: Which Kay echoed actually.
RON:
(inaudible) when people would say or the applicant
would say something like: I had transactions occurring
at 2 am, but I can't remember when. That's really
helpful. Do you remember what year? Well, sort of.
Then to -- but (interference) through the weekend, which
we didn't (interference). Well, did it have your ID on
it? I can't remember. That's really difficult to deal
with.
16
IAN:
RON:
IAN:
RON:
There are going to be these unresolved issues. We
can't wave a magic wand and answer every question,
particularly for some of the older cases.
What we can do is say: we never found a code for that
particular branch, let's run a computer program to pick
up every transaction occurring after -- make it
generous -- make it after 9pm and before 7am in the
morning and at weekends, when the Post Office is shut.
It shouldn't be using that system then. Just strip them
off, have a look at them, for that branch. Rather than
expecting the applicant to have that (inaudible) which
I think the mediator can be a bit unhappy about and say:
hang on a minute, why are you expecting the applicant to
have that data? They wouldn't have that information.
And if they did have it, well, POL is throwing
information away, why would you expect them to have it?
So they might be unsympathetic to POL's response. We
would ordinarily (inaudible). In fact, we have just
suggested that to Angela. Other things that are really
problematical are where the underlying -- the
(inaudible) likelihood is the underlying cause of the
problem is mistakes made at counter level.
Classically, for example, a deposit --
a withdrawal accidentally processed as a deposit. The
argument is why didn't the system take that and flag
that up and stop us doing that? And when we did do
that, it was very difficult by way of the design of the
audit trail to find out -- to find we made that mistake
and we to identify the customer whose account had
benefited. Now that sort of situation gets you into,
well, if some of those things had been investigated more
thoroughly at the time, would that systematic occurring
error or type of mistake be picked up and corrected in
terms of just (inaudible). That's the issue that
underscores it. Does that make sense to you, Ian?
Yes, a lot of the discrepancies are likely to be down
to user error at the end of the day, but that then
immediately moves onto the point Ron has just made,
should the system have better error checking? Should
the system have actually prevented or at least detected
these user errors at an earlier stage?
Some of those are large.
FEMALE SPEAKER 1: There are two (inaudible) either the
system itself or they are pointed through to the
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IAN:
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helpline and seeing something through to conclusion.
I get all that. I come back to my point, how do you get
through this? Because it has the potential to you know
run and run and run and [overspeaking]
We have got to constantly look at ways of simplifying
and streamlining the process. There's got to be some
sort of almost central sort of management overriding
or --
FEMALE SPEAKER 1: Because whenever I have asked the
IAN:
RON:
IAN:
RON:
IAN:
question in this meeting, you have immediately gone down
into, understandably, all the detail that's there and
this was meant to be a top down (inaudible) apology, a
quick settlement. The Post Office (inaudible) handle
some of this stuff better, you made errors, we didn't
handle it as well as we could have done and we are now
putting processes in place so that it can't recur. And
I'm not -- I'm just not hearing -- [overspeaking]
[overspeaking] The best suggestion I have at the
moment is actually to pick a small sample of cases that
possibly are at a fairly advanced stage in the process
and actually use those as test sort of cases, where one
of the objectives is to see what we can do to sort of
streamline the whole process, both Second Sight's report
and the mediation sort of phase and then apply any sort
of lessons learned from that maybe handful of cases to
the much wider population.
At the moment, it is all happening somewhat
sequentially and serially and I think we need to run
a small number of cases as tests first, so that we can
fine tune the system and identify [overspeaking]
When we get 28 cases come through, the question
(interference) let's get other investigators in to
increase the number of investigators to six. The upside
of that is running this in parallel (interference)
process speed things up. Whether that will cause
kickback from either the MPs or the JFSA, will be
something (interference).
Ron, the first thing is to actually evaluate whether
that is going to add any --
I know.
-- because I think there is an argument that says, the
greatest contribution from Second Sight is arguably
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going to be the thematic report rather than the
individual sort of cases report because largely what we
are doing in the individual case reports is going
through the COR almost with a highlighter and
highlighting the issues for the mediator and the same
for POL.
The decision-maker actually is the mediator, not
Second Sight. I think in a number of cases, I hesitate
to use the term added value, Second Sight will be adding
relatively little added value to the individual cases,
but what we have got to be prepared to do is to
streamline that process and identify sort of
opportunities where a very light touch perhaps --
FEMALE SPEAKER 1: To just try and build on that, is there
RON:
a (interference) which is that your priority
(interference) your priority becomes that thematic
report that says these are the things that
(interference) and identify (interference) approvals.
And that is then handed over to us to then use with the
mediation scheme. We can then bring in another business
that has got much more resource, to apply that then to
those cases so that we can potentially accelerate
(interference) scheme. Another thought is we could just
say, we have got the thematic report setting different
outcomes to it, here is where all these different cases
fit and we talk to the mediators about helping us get to
some sort of, I use the word loosely, compensation
recognition for each of those themes which becomes
a generic acknowledgment of compensation, that's then
applied to the (inaudible).
So that we don't -- in that particular occasion --
and we wouldn't do every case individually because it
has not gone through individually or triaged if like
into the (inaudible).
If we can reset something like that, we might get
there by October. Without something like that, I do not
see -- it is just potentially (inaudible). My biggest
worry is that actually either the shareholder executive
or the board says enough, we can't -- I personally don't
want to get to that because I think as Ron said
(interference).
James made that point in all the meetings that we have
attended, that the Post Office is very -- is to be
applauded for (interference) and pretty sympathetic --
19
FEMALE SPEAKER 1: Yes, he has been very supportive
IAN:
RON:
IAN:
[overspeaking].
Another thought I have had, I like the idea of triage,
and I wondered whether the Working Group ought to be
managing the order at which we deal with some of these
cases to a much greater extent than is happening at the
moment .
At the moment the driver is frankly the timetable
because -- the applicant, how quickly they respond to
various points.
There is no logic to that.
I think a much better approach is for the Working
Group to look at the substance or at least categorise
every application. I've (inaudible) a lot of class
action litigation and typically we (interference) our
lead cases, a handful that raise really substantive
points that may have a much wider sort of application
and shouldn't the Working Group be encouraged to adopt
that sort of approach, identify the key cases, the top
half dozen out of 140 odd.
FEMALE SPEAKER 1: Let me interrupt. What makes a key case
IAN:
RON:
a key case? Is it because it fits into a particular
theme?
I think a key case in my book has got to be one where
there is good quality relevant evidence, where the
arguments by the applicant are well presented, where
they are sort of clear. Where they are capable of
resolution. Where it falls within the 7 year window.
Where you have potentially relevant evidence held by
POL.
I think our team would be much better placed by
the Working Group identifying those key cases and maybe
giving priority to those and then seeing if the lessons
learned from those cases can be applied across a much
wider population of cases.
The downside of that, which is really commonsense, is
you can only do that when you have got sufficient input.
You build in a time delay in order to make that
decision. In other words, with fewer than -- less than
half the cases in -- and POL hasn't had the chance to
see them, that decision-making process would have to be
applied in (inaudible) 65/70.
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IAN:
RON:
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POL of course has seen them. We have 61 CORs in at
the moment, all of which have been released to Angela's
team. So that knowledge is available. I wonder
whether -- I do like the idea of selecting a small
sample of almost test cases and concentrating our
resources on those to see whether lessons can be learned
and streamlined.
Chronological order is not particularly smart. One of
the most difficult --
MALE SPEAKER 3: It is rough and ready justice.
FEMALE SPEAKER 1: That sounds a very sensible approach to
RON:
IAN:
the scheme as it is currently. I don't know that it
gets us still to a place of finishing by October nor
does it necessarily address the issues of cost and
compensation and that kind of thing. [overspeaking]
[overspeaking] sympathy from either the JFSA or its
membership or the applicant body or some of the MPs by
expressing what you are saying. You will from James
Arbuthnot but you won't from the likes of Mike Wood and
others whose view is: why do we care what pain and
suffering POL is going through. The pain and suffering
is only the equivalent of one of [overspeaking] cases.
There are a lot of people out there expecting this
process to fail and some of the more militant SPMRs see
this as a step on the road to litigation and I think
what POL ought to be doing is almost a cost benefit
analysis of the potential sort of outcomes
(interference). If mediation sort of fails, what is the
potential cost to POL? In the light of the increased
knowledge that we now have of these cases going to
litigation, we know Shoesmiths are waiting in the wings,
we know they are hoovering up the new information that
is coming to light. We know Chris, that further
disclosure has been made in some of the historic
criminal prosecutions as a result of this process. So,
I think one factor that the board needs to consider is
the alternative scenario if mediation does not succeed,
what other litigations --
MALE SPEAKER 3: In a fraud sense.
IAN:
Yes.
MALE SPEAKER 3: Of course there will always be a number of
people for whom mediation is a failure because
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(inaudible) even with the best run scheme in the world
and we won't agree an outcome, because that's the nature
of mediation. You don't agree all the time.
IAN: Yes.
MALE SPEAKER 3: Particularly if there is a big gap in terms
of --
IAN: And the other element of uncertainty is a weakness in
the process we are following. We have not been rigorous
in terms of requiring the applicants to substantiate the
financial value of their claim.
MALE SPEAKER 3: I agree.
IAN: I think that is a potential sort of delay to the whole
sort of process. Assuming mediation goes reasonably
well, and depending on whether they have a professional
adviser or not, I think a real potential issue is the
fact that we are not requiring them to adopt
a structured approach.
MALE SPEAKER 3: (inaudible) very gloomy about the entire
process actually.
IAN: We want to be completely transparent. We have been
living with this for (interference).
RON: (interference) 25 cases which is the situation, to the
150 odd that we have got now. The number of sort of
thematic issues that crept up (interference) we could
add more if we wanted to. For example, a lot of people
have alleged (interference) that there was some
skullduggery going on in terms of deliberately closing
down their branch (interference) of somebody that was in
the management structure. That's been alleged on at
least five occasions in just (interference).
IAN: Or just to avoid the normal closure cost of closing
branches (interference) POL has dreamt up a weak
prosecution because getting them out in that process is
going to be cheaper then closing the branch and using
the more normal method of (interference).
RON: (interference) stuff out.
IAN: What I would say is it is very useful we have had this
conversation today.
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FEMALE SPEAKER 1: We may be the one --
IAN: That's what I was going to suggest. It has actually
been very useful and we perhaps ought to spend more time
talking to you about ways that we can streamline the
process. We want to do that.
RON: Yes.
IAN: We have got no desire to spend the rest of our lives
croaking on this. And I think it doesn't compromise us
in any way because it doesn't directly impact on the
investigative side. But I think our knowledge of the
work that we have done and the issues that we have come
across actually can make a contribution to some of these
ideas for streamlining the whole process.
RON: The other thing we are trying to deal with, just to
add a complication, is a lot of the responses we are
getting, and we have seen through the Spot process, tend
to be the delivery by Angela and her team of current
operating (inaudible), which -- and speaking of current
tense. In other words, someone will say 7 years ago
this happened. (interference). The answer is that
cannot happen because -- present tense -- because our
procedures make sure it doesn't. We say: stop talking
about current procedures, we don't care about current
procedures. What we have to look at is much more
difficult, unfortunately, is what the system did at that
time. And that's (interference).
FEMALE SPEAKER 1: Yes, I get that [overspeaking] unresolved
issues because (inaudible) to resolve them and that was
the point about mediation, which was to accept that, but
actually there will be [overtalking] and I'm really,
really sorry but I can't [overspeaking] £5 million.
RON: One of the fundamentals is the contract. The argument
that (interference) I never received a 150 page contract
(interference) that procedure required that
(interference). Well, it doesn't matter what the
procedure required, we don't have any (interference).
FEMALE SPEAKER 1: (inaudible) Angela just reinforced that
point because I suspect -- I mean why would they know,
the people working on this today, what was in place
[overspeaking] years ago. They might be relying on
their memory.
RON: Yes.
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IAN:
RON:
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And all the changes that have occurred --
[overspeaking] robust audit trail. [overspeaking].
There was a huge, huge shortfalls and surpluses. Huge
surpluses.
MALE SPEAKER 3: I'm aware of time. One item mentioned in
RON:
IAN:
the introduction was the letter of engagement and for
obvious reasons -- there is really only one or two
points of difference as far as I'm concerned
[overspeaking]. One was your ability to act against the
Post Office in the future. The other issue was,
I thought we had reached closure on the question of not
mentioning or at least not -- the engagement letter --
discussing in any other shape or form any other work
done other than the work done in the engagement letter.
My intention being to focus on the engagement letter on
the work you are doing for the Working Group.
I think at the last hurdle it came back via the
last Working Group discussion, that you wanted the
engagement letter to cover not just Working Group
matters but this so-called wider piece of work with MPs
[overtalking].
Our problem was the first, the scope of the
(inaudible) mediation prevented us from [overspeaking]
work. That was where it came from.
I mean, I deal quite a lot with James Arbuthnot's
office and know something (interference) comes under
(interference) MPs. I was concerned (interference)
letter was completely silent on that issue. I think the
original suggestion was we needed two engagement
letters, one covering the -- because at the moment under
the confidentiality agreement that we have signed, we
are not allowed to discuss any of this with James
Arbuthnot, his office or MPs. Which is contrary to
certainly his understanding of what had been agreed,
I think presumably with you and Alice or whatever. What
I don't want to do is bury our head in the sand. We
somehow need to address or deal with (interference) to
James Arbuthnot and the MPs, which at the moment isn't
covered.
FEMALE SPEAKER 1: Have we dealt with that?
MALE SPEAKER 3: We can deal with that very easily, to say
you can -- contained carve-out -- so that you can talk
to James Arbuthnot and others. That was not the
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stumbling block as far as I recall. The stumbling block
was you wanted the engagement letter to expressly
acknowledge there was a wider piece of work, which
I said I was not in a position to because I didn't
understand there to be a wider piece of work, and/or to
build that into this engagement letter to say you are
conducting two pieces of work. I think you called them
scope 1 and scope 2 and as I said to you, my clear
handover notes from Susan were absolutely crystal clear,
the Working Group is focused on the mediation scheme
itself and that was the piece of work that the
engagement letter was --
RON: I think there was discussion at one point that
(interference) did job 1, dealt with the MPs
(interference) for the Working Group (interference) .
IAN: I mean at the meeting with MPs in July, their initial
request was for Second Sight to produce a further report
in October. We said there was very little point in
doing that and what was more important was to continue
what in that moment were very early discussions about
mediation. The MPs then sort of agreed that October was
too early and left it slightly in the air that they
would be expecting a further report from Second Sight in
January or February this year.
I spoke to Janet last week. That is still left on
the table. And one of the suggestions that came out,
this whole idea of thematic issues was originally
developed by the MPs and one of the suggestions that was
mentioned to us last week was whether the thematic
issues report that we were working on for the Working
Group, could also be used as a way of sort of briefing
the MPs and that will certainly buy us some time and may
streamline and integrate the whole process.
RON: But we certainly wouldn't be able to carve-out in the
middle of this process time to write a separate report
for the MPs, that would be nuts.
FEMALE SPEAKER 1: From the meeting I had with James, he
didn't have an expectation of some other separate report
or separate work at all. We exchanged minutes of the
meeting. There was no issue on that. I think there is
a danger that we over play the MPs' expectations on
things. I think they understand there is a scheme
underway. James is very happy with what we are doing
(interference). It was our suggestion that we update
the MPs because we wanted to be transparent about it.
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I would be very happy, as I said at the beginning, that
we do this along what's emerging on the themes. That
seems to be fine to me, and if the themes helped us do
some sort of triage of the scheme as well, then that may
[overtalking].
We are going to run out of time and I will be
completely honest with you why, because I'm seeing Tony
Hooper at half past. I'm having exactly the same
conversation with him.
RON: Do you want us to tootle off and be available on call?
FEMALE SPEAKER 1: Unfortunately I haven't got enough time,
because I have another couple of meetings coming up.
What I will do is get back to you next week, if that's
okay, because I think all of us need to try and find
a way through this for your sakes and for our sake and
particularly for the subpostmasters, who are sat out
there waiting. Because what I can't have is this
mismatch of expectations and it just feels to me as
though the whole (interference) .
IAN: Maybe at the next meeting it should be a combined
meeting of the four of us plus Tony Hooper.
FEMALE SPEAKER 1: It might well be. It would be much
easier to do that actually, I don't know Tony well
enough, you know him much better than I do. I wanted to
give him the opportunity to have a conversation and see
where his head is at but I think that can be --
RON: It would be interesting simply on the 28th report
crunch and that's where we are going to really see what
happens because when those 28 reports come in, the
original plan (inaudible).
FEMALE SPEAKER 1: When are they coming along?
RON: 28 February.
FEMALE SPEAKER 1: 28 reports from us to you.
IAN: We know there is some slippage.
RON: Let's assume it works and we get a great lump through
the sausage machine. Can we clear them within a month
that we originally hoped to be able to clear the cases?
POL will also have to clear things in a month, in some
cases it takes them four or five months to produce its
26
report, actually got a lot more work to do.
FEMALE SPEAKER 1: Because of the nature of the COR?
RON:
IAN:
RON:
IAN:
RON:
Yes, because of the issues being raised and the time
it takes to get the information from Fujitsu and so on.
I'm not horribly worried about -- provided we can
streamline the case review report construction, and
agree with Tony and the others what it looks like, it is
not going to be complicated. I'm not as worried as
I was two months ago, that we are going to have
a horrible bottleneck that takes three months to clear.
I'm worried about (inaudible) and I would like to have
more resources and Chris isn't going to necessarily be
enough.
I think we have to be careful about saying additional
resources will speed things up because what you can't do
is immediately bring somebody up to speed
[overspeaking].
Briefing five investigators.
I think the way to deal with this is to simplify it
and almost automate our individual case report.
You and I have made a lot of progress on that in the
last couple of weeks actually because at first we were
kind of (interference) writing the report. Now we are
saying we are going to be much more discipline
(interference). We have got to deal with all eight, but
we better not raise ten because we can't just invent an
issue because we think we would like to write about it.
I know it is crass.
FEMALE SPEAKER 1: No, it is not because you started with
IAN:
six or seven and now it is 17. So it does feel as
though (inaudible). What I was going to say, if things
come up, what I don't want to do is to ignore them
because that was not the point of the exercise at all.
If other stuff comes up separate to the themes I imagine
are only six or seven that you had established, that
ought to be dealt with somehow separately. Because
otherwise this things just grows and grows and grows and
I don't know how you --
We may even be able to simplify the 17 themes because
two-thirds of them (interference). In some cases they
are (inaudible) after the distinction between
(inaudible) transactions.
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RON: For example there is a link between the telecoms and
power failures and (interference) giro, the person who
comes in and pays --
FEMALE SPEAKER 1: (inaudible).
RON: -- pays their gas bill and electricity bill and that
gets paid and they don't get charged. That's down to
the system -- it is not just one system the transaction
has to go through, it is sometimes two. (interference) .
IAN: I don't know.
FEMALE SPEAKER 1: Can you take this away and --
IAN: Yes, we will have a look at that and see what we can
do to streamline that.
FEMALE SPEAKER 1: Thank you very much indeed. I will talk
to Tony this afternoon. There is a board meeting
(interference). I guess it would be next week
(interference). Thanks.
RON: Yes. Thank you very much.
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