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From: Watson, Richard - UKGI[/O=EXCHANGELABS/OU=EXCHANGE ADMINISTRATIVE GROUP.
(FYDIBOHF23SPDLT)/CN=RECIPIENTS/CN=FB2FB49863874083BAB9FCBF8B44FDEE-
WATSON, RIC]
Sent: Thur 14/11/2019 5:24:11 PM (UTC)
To: Nigel Boardmant.
Cc: Cooper, Tom - UKGI:
Subject: RE: Post Office GLO - amended merits advice and update on permission to appeal - strictly
privileged and confidential
Nigel
Thanks. The BEIS/UKGI/HMT working group met today and was able to raise questions and comments on the HSF
advice directly to Alan Watts who was present for the first part of the meeting.
After Alan had left I conveyed the view in your below email and the comments in your previous email to the group.
There was a good discussion and a consensus from HMT and BEIS colleagues that, al hough they recognised it was
unlikely, if a final settlement could be achieved with the whole claimant group forieaeven! that would be a very good
result. The group were therefore persuaded that if that was the top figure POL were seeking approval for based on
the advice of their lawyers then in principle that should be agreed. Alan confirmed to the group that he was presently
minded to make a starting offer around a ubject to anything different he might glean from the mediator. He
was very clear that he had _no intention of going very much higher unless there was a realistic prospect of achieving a
settlement. He obviously recognised the concern that whatever level he went up to would set the floor for future
settlement discussions.
The POL board approval to a settlement figure up to ““iwas subject to the condition that any offer above) sau!
could be made only if it ensures a settlement takes place and would require POL [CEO and Chairman] approval. The
working group agreed that a similar condition should be imposed by HMG, so whatever figure the POL CEO and
Chairman approved over £50m would also need approval from senior BEIS and HMT officials.
So the recommendation to BEIS and HMT ministers is to approve a settlement up to sion condition that any offer
:could be made only if it ensures a settlement takes place and would require POL [CEO and Chairman]
approval, as s well as the approval of officials from BEIS and HMT before being made.
The working group recognised the difficulties regarding the convicted claimants. While they did not consider it was for
them to determine POL’s litigation strategy we will have further discussions with POL about that issue and Part 36
offers following a debrief from the mediation and the outcome of the Horizon trial.
I have not named you in the submission that it is intended will go to Ministers tomorrow.
I will keep you apprised of further developments and obviously happy to discuss anything.
I am not in the office tomorrow but will be picking up emails.
Kind regards
Richard
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From: Nigel Boardmani__ GRO.
Sent: 13 November 2019 22
To: Watson, Richard - UKGI I
Subject: Re: Post Office GLO - amended merits advice and update on permission to appeal - strictly privileged and
confidential
The position I would take is that I am pessimistic about our attempt to settle being successful at these levels - a view
shared by the legal advisers. I therefore think that offering them The upper end of the proposed figures provides
comfort to the opposition that we recognise that we are in a week position, without achieving anything useful.
I would much rather we took the position that we don’t think we are liable but we are willing to pay an amount which
reflects our likely costs of fighting, since we would prefer to settle with them than fight and pay the lawyers.
If we have completely miss-read the situation, and the other side would settle at the upper end of the range, then I do
not see any harm in the post office saying that they would like to get to that sort of figure, but they need to go back to
the department for approval, and then we could approve it if you felt it was appropriate.
In other words, I do not see the benefit in giving the negotiators the power to go to that number.
Nigel
Sent from my iPhone
On 13 Nov 2019, at 18:38, Watson, Richard - UKGI
Nigel
Quick update - the POL Board sub-committee approved the HSF advice of a settlement figure between
i IRRELEVANT ‘They want HMG to approve offering up to obviously not starting at that level
and only going there if a settlement is really achievable). They would also like a simplified mechanism
whereby they can get quick HMG approval to go above that will dispose of the case.
Tom and I don’t think tomorrow’s group will be comfortable with that. We do, however, think the group
n the basis that it represents 2 years loss of earnings, plus costs and interest ona
ground up reco’ ‘ability basis. We don’t think there is a realistic prospect of settlement at that level but
agree that if the whole claim (all 555 claimants) agreed that figure it would be a good result for POL.
Let me come back to you after tomorrow’s meeting with a read out and then see where we all are.
Ideally I will want to reflect any observations you have on the figures in the advice to Ministers.
Kind regards
Richard
From: Watson, Richard - UKGI
Sent: 13 November 2019 15:32
To: Nigel Boardma i
Subject: RE: Post Office GLO - amended merits advice and update on permission to appeal - strictly
privileged and confidential
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Thanks Nigel
Kind regards
Richard
From: Nigel Boardman:
Sent: 13 November 2019 15:31
To: Watson, Richard - UKG'
Subject: Re: Post Office GLO - amended merits advice and update on permission to appeal - strictly
privileged and confidential
Yes I am content with an offer up to or not materially exceeding the figure you mention.
Nigel
Sent from my iPhone
On 13 Nov 2019, at 14:38, Watson, Richard - UKGI
Nigel
Thank you for turning to this so quickly.
I will keep in touch by email but my current intention, obviously subject to your approval, is
to include a line in our advice to Ministers which will be sent on Friday that says you have
seen the HSF advice and are content with the proposed settlement range agreed by POL. I
will email later when I have that range following the POL sub-committee meeting later
today but I am anticipating it to be in the order o'
I don’t think I have you phone number so would be grateful for that in case it is necessary
to call.
Kind regards
Richard
From: Nigel Boardman:
Sent: 13 November 2019 14:
To: Watson, Richard - UKGI:
Subject: Re: Post Office GLO - amended merits advice and update on permission to appeal -
strictly privileged and confidential
Richard,
These are my thoughts.
We have to accept that a proposal, even at the upper level suggested by the legal advisers,
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is unlikely to resolve the litigation given the funders’ expectations and the uncertainty of
how damages will be calculated.
Since the judge has asked for the PO to go through the mediation process, and given how
close the timing is to the mediation date, it still makes sense to proceed with the mediation
notwithstanding the improbability of a successful outcome.
Against this background, and recognising I am very late to this question and have not spent
anything like the time on it that the legal advisers have spent, my thought would be that
we would not concede on liability, even informally, and we would make an offer which we
said was to save us the expense of continued fighting rather than anything else. This would
therefore be the offer at the lower figure and not allow scope for an increased figure
during the mediation.
If during the mediation it became clear that an offer at the higher figure proposed by the
legal advisers might elicit a settlement (which is regarded as highly unlikely), we can
always continue the mediation at a later date to arrive at this outcome.
This has the advantage that we do not have to get into a distinction between the criminal
and the civil cases. However, I think it would be worth explaining to the claimants what
advice we have received about the difficulty of arriving at a settlement on the criminal
cases and ask them how they would expect them to be resolved. In other words, settling
the cases without going through the criminal appeal process is as much their problem as
our problem and it would be interesting to hear if they have any thoughts on a solution.
This discussion would be on the basis that such settlement would only occur were an
appropriate number to be agreed.
I would not at this stage take a decision on the part 36 offers. I think we should wait until
after the mediation until we think of making such offers. It is premature to decide on that
at this stage.
I hope this is helpful but do give me a call if you want me to clarify any of this.
Nigel
Sent from my iPhone
On 13 Nov 2019, at 10:27, Watson, Richard - UKGI
Nigel
Following discussion with Tom we think a short note from you setting out
points you would want to make will assist the UKGI/HMT/BEIS discussion
tomorrow. The note would be for sharing with that internal group not POL or
their advisers.
To our mind the focus of tomorrow’s meeting is getting comfortable with the
level of authority POL want for settlement purposes though we will also be
flagging our concerns around how to deal with the convicted claimants and
part 36 offers.
I will update later with a readout from the POL board litigation sub-
committee meeting which takes place at 4pm today.
Happy to discuss
Kind regards
Richard
Richard Watson IGeneral Counsel
UK Government Investments
1 Victoria Street I London I SW1H OET
T ‘
ittps://www.ukgi.org.uk,
From: Watson, Richard - UKGI
Sent: 13 November 2019 08:24
To: Nigel Boardman!
Subject: FW: Post Office GLO - amended merits advice and update on
permission to appeal - strictly privileged and confidential
Alisdair Cameron
Ainslie Cranwell
Subject: Post Office GLO - amended merits advice and update on permission
to appeal - strictly privileged and confidential
All
Please see attached:
1. An updated merits advice following today's application for
permission to appeal;
2. An updated draft CFO confirmation letter which includes details of
how Post Office would propose funding any settlement up to the values
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set out in the note; and
3. (For those who are interested) the transcript of the hearing before
Coulson U. A summary note will follow.
4. I have also re-attached the note on the convicted claimants so that
all the material is in one place.
Coulson L is aiming to hand down his order by midday next Friday. Based on
how the hearing today progressed, however, we are not optimistic of
obtaining permission except perhaps on a few grounds. In particular:
* Coulson LJ seemed comfortable in principle with Fraser J's
implication of good faith;
* He was also comfortable with the majority of the specific terms that
Fraser J implied, either as a consequence of good faith or business
efficacy (commenting that some he would “imply in a heartbeat").
* There were however two areas he was uncomfortable with and in
respect of which we may get permission, namely:
© the implied term to effect that notice cannot be given
irrationaly/absent good cause/where PO is itself in material
breach (i.e. the terms which give rise to retirement-age post-
termination losses); and
O Fraser J's construction of the notice provisions as "minimum"
provisions (i.e. not less than 3/6 months)
* On the latter, permission will only assist Post Office if it is also able to
overcome the alternative Autoclenz, "onerous and unusual" and UCTA
arguments (if the notice periods themselves do not stand, how they are
applied becomes irrelevant). On these points, Coulson J was difficult to
read but ultimately Helen Davies QC was not optimistic that he would
be with us on all three.
« We may get permission on the question of whether a material
breach is equivalent to a repudiatory breach
The net effect of the above is that Post Office's position on liability has not
improved (it has probably worsened). However, on the ability to give notice
(relevant to quantum) we hope to have made some progress.
We can discuss the position further at the SubCommittee meeting tomorrow
but do let me know if you have any immediate questions.
Kind regards
Kate
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