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From: Rodric Williams <1
Andrew Parsons
Subject: RE: URGENT - Letters to Freeths for approval [BD-4A.FID26896945]
Date: Tue, 13 Feb 2018 14:14:28 +0000
Importance: Normal
Inline-Images: image001.png; image002.png; image003.png; image004.png
Thanks.
I’ve spoken to Amy re: disclosure, and left voicemails with Johnny and Emma for a call back re: March
2019 and S4C respectively.
Rod
From: Mark Underwood1
Sent: 13 February 2018 10:37
: Rodric Williams #
Ce: Amy Prime {" GRO _____5 Emma Campbell-Danesh < .
jonathan Gribben, GRO !; Victoria Brooks <3
Subject: RE: URGENT - Letters to Freeths for approval [BD-4A.FID26896945]
Thanks Andy — yep, principally audit declarations. If we have to ask the question, we have to ask the
question — and like you say, it doesn’t mean that we have to accept the answer.
Mark
> Mark Underwood
Head of Portfolio: Legal, Risk & Governance
Ground Floor
20 Finsbury Street
2017 Winner of the ‘°¢" £°7Y 942
Global Postal
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Mobile number
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From: Andrew Parsons in GRO
Sent: 13 February 2018 10:35
To: Mark Underwood! <
; Rodric Williams
Emma Campbell-Danesh <
; Victoria Brooks
'GRO
“subject?
RE: URGENT - Letters to Freeths for approval [BD-4A.FID26896945]
Thanks Mark
On the security for costs point below, are you thinking about audit declarations and FOI?
These are the two critical questions to ask Freeths. When costs are being challenged, you benchmark against the
other side's costs and the claim value. If we don't get this information from Freeths, then we may need to estimate
these figure ourselves. I think it would be preferable to get Freeths numbers and then say we don’t accept them, then
having to put forward our own numbers and then defend them.
Kind regards
Andy
Andrew Parsons
Partner
Womble Bond Dickinson (UK) LLP
eger30a
WOMBLE womblebonddickinson.com
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DICKINSON v ©
From: Mark Underwood1 :
Sent: 13 February 2018 10:04
To: Andrew Parsons; Rodric Williams
Cc: Amy Prime; Emma Campbell-Danesh; Jonathan Gribben; Victoria Brooks
Subject: RE: URGENT - Letters to Freeths for approval [BD-4A.FID26896945]
Andy — thanks
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Security for Costs: I agree that we should continue as planned and issue the application. This doesn’t need
to go to the PLSG, but the question re a bond would do if/when we get to that stage. I am happy with the
drafting but would like to understand a little more the extent to which we have to ask the following questions
because, if this information is provided, it may have ‘flow downs’:
your clients’ estimated total aggregate claim value (including interest); and
your clients' current costs and estimated future costs to the end of the Common Issues trial in November
2018.
Model C Disclosure: I agree with the approach, and that this does not need to go to the PLSG — we just need
to make sure Mel is aware. I am happy with the drafting. I think the need to be consistent also flows down to
our position regarding the custodians and, specifically, auditors.
March 2019 Issues: it would be useful to have a call to discuss the current list of issues, more from an
understanding point of view than anything else. I am free from 11-12, 12:30 -2 or after 3, if that works for
Rod and Jonny.
Mark
° Mark Underwood
Head of Portfolio: Legal, Risk & Governance
Ground Floor
20 Finsbury Street
2017 Winner of the ‘°74°" &7¥ 942
Global Postal
Award for
Customer Mobile number +
Experience
From: Andrew Parsons [J ~GRO.
Sent: 12 February 2018 22:26
To: Rodric Williams < GRO _P; Mark Underwood]
<<
Ce: Amy Prime <"
7 .; Jonathan Gribben
‘GRO
Subject: URGENT - Letters to Freeths for approval [BD-4A.FID26896945]
bell-Danesh ¢
ictoria Brooks +
Rodric, Mark
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Please find below a number of points on which I would welcome your comments / approval. I do not believe that any
of these matters require approval by the PLSG because they are either (i) the implementation of decisions already
made by the PLSG or (ii) requirements of the Court. I would be happy to update the PLSG on these matters at the
meeting on Wednesday but our time is very limited before the next CMC and we would like your urgent instructions on
the below during the course of tomorrow if possible.
I'm available at 10:30 tomorrow morning if that would be a good time to speak. I'm then out until about 4:30pm but you
may speak to the following if I'm not around:
Amy — Model C disclosure
Emma — Security
Jonny — Horizon issues
All of the points below have been approved by Counsel.
Security for Costs
Attached is a response to Freeths recent letter on Security. Freeths' letter raises no new info that changes the position
on security so our advice is that Post Office should push forward with the security application at the end of this week
unless we hear anything new from Therium before then.
Freeths have requested that Post Office agrees to a Costs Management Order before requesting security for its costs.
ACMO can cover a number of things but in the majority of cases it means Costs Budgeting. This is a process where
we submit a budget for Post Office's litigation costs to the Court for approval. The Court usually holds a hearing where
the budget is examined line by line, the other party argues that the budget should be revised down and the Court
approves the revised budget. There is an assumption that a party cannot recover more costs than set out in the
approved budget. If the shape of the litigation changes or the assumptions in the budget change, a party needs to
apply to the Court to revise its Cost Budget. Costs Budgeting is mandatory in most cases, save for those where the
claim is for more than £10m.
There are a number of points to consider in the current litigation.
If we are correct about the need for security, then POL's costs will effectively be capped at the level of security
anyway. A CMO would only materially change POL's cost risk if the security application is not made.
The judge is going to have to conduct a quick review of POL's costs budget as part of the security application. We
are therefore going to be subject to some level of cost scrutiny anyway.
I am concerned (and so are Counsel) about the amount of work needed if we have costs budgeting. Every time the
judge makes a new direction, we would need to revise the costs budget. In this litigation that could be quite unwieldy
as we have changes of direction at nearly every CMC. I think this will hit POL harder than the Cs, given that Post
Office will carry the bulk of the work on disclosure and expert evidence.
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From a neutral / objective standpoint, it's difficult to see why cost budgeting is needed. The value of the Claimant's
claims is £200m+. It would require some massive spending, way higher than current predictions, for us to reach a
level where costs were disproportionate.
There may be some advantage in Cost Budgeting if it helps control the Cs costs. They have so far spent double what
Post Office has spent (£2.7 v £4.5m) but, interestingly, they have not provide us with a cost update in the last 2
months, even though they are required to update us every time they spend another £250k. Either Freeths have forgot
to update us or they have significantly slowed their rate of spending.
Unless a CMO would be useful in controlling the Cs costs, we see little reason to support cost budgeting. We
therefore need sight of the Cs future costs in order to be able to judge the merits of a CMO.
I've also had a call this morning from Freeths on a without prejudice basis. In essence, they are prepared to put up a
bond as security if we agree to cap the costs that Post Office can recover from the Claimants. They are worried that
our costs will get too high and want some control over them. They would also like us to explore this possibility before
issuing our application for security.
Counsel and I are not minded to hold up our application for security. Freeths have dragged their heels on this for a
long while. Also, getting security in place will be tricky — Therium will need to fund it, the insurers will need to put up
the bond, the terms of the bond will need agreeing and we'll have to complete some form of costs budgeting process in
order to establish the security level. I can see that getting dragged out for weeks if not months.
We also don't see why Costs Budgeting needs to precede the security application. The Court can decide the principle
of whether security should be ordered and make an interim assessment on the level of that security, which can be
revised later if Costs Budgeting is adopted.
Our recommendation therefore is that we issue the security application, but ask for a hearing date no sooner than 6
weeks. This gives us time to explore Freeths' proposal, but creates a time pressure so that this does not get dragged
out.
I should be grateful if you could approve the attached letter which implements this recommendation.
Model C Disclosure
We have reviewed the Claimants' requests for Model C disclosure. They are, in effect, still seeking massively wide
disclosure that goes far beyond the Common Issues for November and far beyond admissible factual matrix. The
attached Model C table includes our comments on each request (which has a few points in yellow that need finalising
tomorrow).
We recommend that Post Office opposes nearly all these requests, save for those that are sufficiently narrowly defined
that giving them would be easy. We believe that it is important that Post Office adopts a consistent approach. If we
oppose certain categories of documents on the grounds that they are inadmissible, then we need to oppose all similar
documents save where there is an obvious reason not to do so — which leads to a large number of requests being
opposed. We should also keep in mind that Post Office's original Model C proposal was drafted very generously and
in places went beyond admissible factual matrix, so the Cs are already getting more than they are strictly entitled to.
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Counsel and I have a fair degree of confidence that the Court will be with us on this approach so long as we continue
to constructively engage with Freeths.
We have prepared the attached draft letter to Freeths explaining this position. We should be grateful for your
comments on / approval of this letter.
March 2019 issues
Please find attached a draft Order that we wish to send to Freeths setting out our proposals for the March 2019 trial.
Our approach has been to stick rigidly to only issues that are purely technical in nature, in line with the Judge's
comments at the last CMC. We expect Freeths to take a wider approach and seek to pull in issues like training on
Horizon and support in using Horizon. We do not believe the Judge will support that idea. We also do not believe that
this is an area where we should play tactical games in trying to shape the issues to POL's advantage. That will be
seized upon by the Claimants and could lead to criticism from the Judge.
The list of issues Counsel currently proposes is in Schedule 3 to the draft Order. Having reviewed the pleadings, this
list represents all the purely technical Horizon issues in dispute. We are going to run this list passed Fujitsu tomorrow
and Counsel is going to consider whether this list could be cut down / refined.
The draft Order also sets out our proposed directions to the March 2019 trial. These split out into four phases:
Phase 1 (now to May 18) is briefing the experts on Horizon and getting them to refine the issues in dispute into proper
technical questions.
Phase 2 (May 18 to August 18) is an open period in the timetable into which further directions can be fit. It may be
that there should be further disclosure or orders for the inspection of Horizon by experts.
Phase 3 (August 18 to October 18) — the experts produce their principal reports into Horizon.
Phase 4 (December 18 — February 19) — supplemental reports are produced in light of anything coming out the
Common Issues trial.
To accommodate this, we do need to move the March 2019 trial back by two weeks. Despite the Judge's comments at
the last CMC, I doubt he would consider this to be an unreasonable request, even if he did not agree to it.
There is no doubt that this timetable will require a considerable amount of work and it will require us to work in parallel
to the Common Issues trial. That will be challenging but there is no realistic alternative to this.
Subject to any further comments from Fujitsu or Counsel, we should be grateful for your approval to send this draft
Order to Freeths for their comments.
Kind regards
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Andy
Andrew Parsons
Partner
Womble Bond Dickinson (UK) LLP.
" GRO
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