WBONO001165
WBON0001165
Suspense Account rider
1. As to paragraph 38:
(1) Post Office does not have a clear understanding of what the Claimants are defining
to be a "suspense account" or what is meant by the phrase "unattributed surpluses
including those generated from branch accounts".
(2) Post Office operates, as part of its central financial management systems, certain
accounting ledgers in relation to its dealings with Post Office clients and other
matters. These accounts are part of the reconciliation process described in
paragraph [39 XX] and may have credits recorded in them. For example :
(a) A client, such as a bank, makes a payment to Post Office in respect of a
particular transaction undertaken in a branch but the payment exceeds the
amount that Post Office considers to be due.
(b) Post Office does not reach agreement with the client as to the amount due and
the client does not accept repayment of what Post Office considers to be the
overpayment.
(©) Post Office also seeks to determine, without success, whether the
overpayment is due to be passed back to a branch as a credit (via the
Transaction Correction process).
(d) Where the proper beneficiary of the credit cannot be determined, the resulting
overpayment is temporarily recorded as a credit in Post Office's accounts. If it
is not resolved within 3 years, the amount may be credited to Post Office’s
profit and loss account.
(3) The operation of accounts in this way reflects ordinary business practice.
2. As to paragraph 39:
(1) I The Claimants have not pleaded any “shortfalls wrongly attributed to the
Claimants”. In these circumstances, Post Office does not speculate as to how any
such shortfalls could in principle have arisen and how, if at all, such shortfalls (or,
more accurately, the losses giving rise to such shortfalls) might relate to any
WBD_001035.000001
WBON0001165
WBON0001165
discrepancies between Post Office and its clients. In the absence of proper
particulars, there is no case to which Post Office can meaningfully respond.
(2) I Notwithstanding this, a shortfall in a branch is one that is declared by a
Subpostmaster , as per the Branch Trading Statement process described at paragraph
[xx] above, and is not "attributed" to that branch by Post Office. As per paragraph
(53 NXE PABSHEAUREAZD}, absent evidence to the contrary, the
Subpostmaster is liable for that shortfall.
(3) Post Office looks to reasonably help Subpostmasters avoid or mitigate the liability
for the shortfall by reconciling branch transaction records against those of Post
Office clients and then issuing Transaction Corrections where appropriate, as
described at paragraph [XX] above.
(4) This reconciliation process is however not perfect. There are situations where an
over or under payment by or to a Post Office client cannot, through reasonable
effort, be matched to a branch or be determined as a sum that should be returned to
a branch. These circumstances could lead to unresolved credits of the type
described in paragraph [73 XX] above being taken into Post Office's profit and loss
accounts after 3 years.
(5) Further or alternatively, pending further particulars from the Claimants as to what
they mean by "suspense accounts", Post Office believes that the unresolved sums
moved by default after 3 years from its accounting ledgers and into its profit and loss
account will be inconsequentially small in comparison to the shortfalls recorded in
the branches of most Claimants. [TO BE CONFIRMED BY DELOITTE AND POL]
(© Inany event, in light of Post Office's position on the true meaning of the SPMC, as
set out below at [94(4) XX], the operation of Post Office's accounting ledgers does
not affect a Subpostmaster's liability for a shortfall.
WBD_001035.000002