From: Simon Henderson i
To: Jonathan Gribben +
atie Simmonds <......-2------
Cc
Subject: RE: KEL analysis
Date: Thu, 15 Nov 2018 09:31:04 +0000
Importance: Normal
Inline-Imag
: image001.png; image002.png; image003.png
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Yes that would be sensible
Simon
From: Jonathan Gribben [! a GRO.
Sent: 15 November 2018 09:27
To: Simon Henderson
Ce: Katie Simmonds <b... .v-neneneeerer nnn
Subject: RE: KEL analysis
Simon,
Thank you for this. Are you happy for me to share it with FJ and for us to work off this version during the call?
Kind regards
Jonny
Jonathan Gribben
Managing Associate
Womble Bond Dickinson (UK) LLP
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From: Simon Henderson [!
Sent: 14 November 2018 19:13
To: Jonathan Gribben; Anthony de Garr Robinson
Cc: Andrew Parsons; Katie Simmonds
Subject: RE: KEL analysis [WBDUK-AC.FID27032497]
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Jonny
Please find attached the table to be attached to Steve’s statement with comments from both Tony and me
(they all appear under my name because I have incorporated Tony’s comments).
There are various points of detail which I hope can be picked up.
There are also some bigger picture points:
We think the key thing is to be clear about all those KELs where there was no impact on the branch
accounts. Sometimes this is clear, sometimes the draft is a bit wishy-washy about this. We need to tighten
this up
If there was some impact, or we think there might have been, we need to be clear about whether the various
Horizon countermeasures (as Robert calls them) would have picked them up. Again, the approach here is a
little inconsistent and I think this is a key point: it is not our case that Horizon is perfect but it is our case that
it effectively flagged up the vast majority of its own errors and we need to bring that across
Also, if there was impact, we need if possible to say how it was followed up, and that it was followed up
with all those affected by it ie. to meet the point that PO just let losses lie where they fell and treated SPMs
as being at fault when, with diligence, PO should have known that was not the case.
Realistically we will not be able to address every point we have raised, but I would really like to get a tighter
version out which takes a workmanlike and consistent approach to these issues.
There is also an important issue on item 12 where a Balancing Transaction is referred to: we need to make
sure this is not cutting across the evidence we have already given on this and to address it if it does.
Our comments tail off somewhat towards the end since we were anxious to get this over to you asap: but I
think you will get the flavour of our concerns.
Best
Simon
From: Jonathan Gribben [ GRO I
Sent: 14 November 2018 13:55
To: Anthony de Garr Robinson GRO bs Simon Henderson
GRO.
Ce: Andrew Parsons 1 GRO b Katie Simmonds <
Subject: RE: KEL analysis [WBDUK-AC.FID27032497] —
GRO
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Dear Tony and Simon,
It looks like FJ are free to go through this at 4:00pm. Does that work for you or would tomorrow morning be better?
Kind regards
Jonny
Jonathan Gribben
Managing Associate
Womble Bond Dickinson (UK) LLP.
GRO
‘Stay informed: sign up to our e-alerts
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From: Jonathan Gribben
Sent: 14 November 2018 10:31
To: ‘Anthony de Garr Robinson’; ‘Simon Henderson’
Cc: Andrew Parsons; Katie Simmonds
Subject: RE: KEL analysis [WBDUK-AC.FID27032497]
Dear Tony and Simon,
Thank you for this. The table has been produced as a direct result of us asking FJ (we produced the table and asked
FJ to complete the blank columns). No new documents have come to light while producing it.
Please find attached the latest version of the table and the text that we are proposing to insert into Steve's statement.
We are also working on the high-level map below to help us complete the wording introducing the table (key points are
whether the issue was a software issue and whether it had a financial impact)/.
We are sending the table to FJ now too (you'll see that there are some queries for them to address). I suspect that
there will be a call to run through their comments. It may be worth one or both of you joining that call to discuss any
comments that you may have with FJ. Grateful for your thoughts.
Kind regards
Jonny
KEL Cause of issue [Financial impact Summary / additional comments
1 Payment Mismatch
2 Software None
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3 Potential unknown, None
system problem
4 Software - IShould be obvious to PM,
Dalmellington financial impact possible,
Icould be resolved by TC
5 Software [Temporary impact
6 Software [Temporary impact
7
8 Reference Data None SSK
9 Human error (POL) [Should be obvious to PM,/ « —_ Better explanation requested by Andy
financial impact possible,
[could be resolved by TC I + SSK
10 Potential unknown None
system problem
1 Reference data None
12 Human error (branch) [Should be obvious to PM,I « —_ Flagged by Andy, in particular in relation to the detail
could be resolved by POLI surrounding the balancing transaction and process —
issuing a balancing have updated with details from our call with Fujitsu.
ransaction
* Even if done locally, would appear in the audit trail. If
the process was being followed, injected at the data
centre and authorised - however done would have
ended up in the audit trail. Data centre now in Belfast
moved in 2009
13 None «Better explanation requested by Andy
e SSK
14 Human error or None
software
15 Human error or None
software
16 Human error (branch) Financial impact caused I Andy has suggested we include a better first explanation
by user error in branch and then use this for the later references
17 Human error (branch) [None Better explanation requested by Andy of the failure to
recover the transaction
18 None
19 Reference Data None
20 Software Should be obvious to PM,I Better explanation requested by Andy to explain why SPMR
financial impact possible, I not needing to pay
Icould be resolved by TC
21 Potential software but INone
not able to replicate
22 Potential software but Andy concerned RE this KEL and asked for a better
not able to replicate explanation
GJ has referred us to his comments on the £ KELs however
none appear relevant
23 Reference Data None
24 Potential software but [Potential Andy concerned RE this KEL being serious and asked for a
not able to replicate better explanation — I've included as much as I could from
our call with Fujitsu
25 Hardware INone
26 Customer card None suggested
27 Hardware None suggested
28 Hardware None Better explanation requested by Andy
29 Reference Data None
30 Communications Rectified by FJ
failure reconciliation and . or TC
jso no impact expected
31 Payment Mismatch None
32 Withdrawn products None suggested Related to testing issue that was resolved, however, need to
expand further as there were 2 relevant live instances
33 Payment Mismatch None
34 Software Potential small
occurrences
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35 Software Potential small
occurrences
36 Human error (branch) Yes, caused by user error
jand PM expected to be
liable
37 Software - IShould be obvious to PM,
Dalmellington financial impact possible,
Icould be resolved by TC
38 Test None
39 Hardware None
40 Software None (if correct recovery I Andy asked us to check that this isn’t the Phantom
process followed) Transaction cited by Setpal Singh
FJ confirmed:
First raised in 2000 and last updated in Jan 2004
“Phantom sales’ reported by users but items can only be
added to the sales stack if the screen or keyboard were
generating key sequences so implication that there was a
hardware issue so it was swapped out.
If items were added to the sales stack then these were
presumably more likely to be ‘simple’ items, such as a
stamp, rather than complex multi-step transactions. If these
‘simple’ items were settled without the user knowing then
when they came to balancing they would physically hold
more of these items than the system expected. A stock
adjustment of these items would then effectively cancel out
any ‘phantom’ sales of these items."
41 Unknown None
42 Software Should be obvious to PM,
financial impact possible,
could be resolved by TC
43 Software Potential Better explanation requested by Andy
44 None
45 None
46 None
47 Reference Data ‘es, caused by user error:
jand PM expected to be
liable
48 Reference Data None
49 Local Suspense
Account
50 Software INone (if correct recovery
process followed)
If not followed, TC can be
issued
51 Back-end POL reports _INone
52 None
53 Coding error INone suggested
54 Payment Mismatch
55 None suggested
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From: Anthony de Garr Robinson [i _
Sent: 13 November 2018 11:37
To: Jonathan Gribben; ‘Simon Henderson’
Cc: Andrew Parsons; Katie Simmonds
Subject: RE: KEL analysis [WBDUK-AC.FID27032497]
Dear Jonny
Thanks for this which Simon and I have discussed after I asked Simon to research some of the legal
principles. Simon has largely drafted this email, which sets out our joint thoughts.
We think that how this issue has been managed (i.e. how the request to create the table came to be made) is
key. If the FJ witness has taken it upon himself to ask his team to draw up the table, then it is difficult to see
how any privilege attaches. However, if the table has been produced as a direct result of WBD requesting FJ
(a third party and not WBD’s client), then that would be a request for a document to be produced for the
dominant purpose of litigation — and so privileged. Litigation privilege potentially applies both to lawyer-
third party communications and to client-third party communications (see Thanki @ 3.14).
This privilege should extend to discarded drafts etc. See Thanki at 3.28:
“The main practical scope today for a “materials for the brief” or a “materials for evidence” category
of litigation privilege would be preparatory documents generated by the client which do not embody
communications with third parties (such as a client’s working notes or internal documentary
communications within a corporation for the purposes of litigation, but which do not pass between a
third party and the client or a third party and the lawyer). For example, an external or in-house lawyer
might ask employees to prepare draft proofs for the purposes of prospective litigation; if for whatever
reason these proofs are not actually sent to the lawyers or to someone within the organization who
could be classified as the client, there is no question that they would be privileged if satisfying the
dominant purpose test. Likewise, if they had come into existence for the dominant purpose of use in
litigation, there is no doubt that the preparatory material in issue in Three Rivers 5 would have
attracted litigation privilege.°4 As the Court of Appeal held in Three Rivers 5:
It is clear on the authorities that documents emanating from or prepared by third parties or
employees of a party are covered by the principle of ‘litigation privilege’ if prepared with the
dominant purpose of use in existing or contemplated litigation.”
We think that should be sufficient to cover drafts and working documents which were prepared for the
purposes of this exercise.
However, that is not the end of the matter. First, there is no privilege in the underlying data or facts which
are being investigated here i.e. the actual KELs ete or data relating to those KELKs. So if the investigation
revealed, for example, some KELs or data which are plainly relevant to the disputes (e.g. because they
evidence losses to branch accounts) then that material would become disclosable in our view. Further, the
exercise is akin to the preparation of expert evidence (ultimately it is for Robert’s benefit we think) and the
witness could legitimately be asked about how he (albeit at the request of WBD) went about preparing this
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analysis. We therefore think that WBD/ FJ must be very clear about the scope of the exercise and to ensure
that they are fully aware who carried it out, and what was revealed in the course of it.
A key point is that even though the information is set out in a table and looks complete, the claimants will be
entitled to test it— amongst other things by asking how and by what processes the information was arrived at,
what data/documents were used as a source of information, what assumptions were made and what
calculations were done on what figures etc, and maybe even what corrections needed to be made to get them
right. Also, the underlying data/documents would be disclosable and we should assume the claimants will
demand disclosure.
We cannot see that the way in which the table is presented (e.g. in an appendix) would make a difference.
The witness would still be saying that (i) he has procured the preparation of that evidence and (ii) he wants it
to be accepted as part of his evidence.
Best regards,
Tony
From: Jonathan Gribben
Sent: 12 November 2018 19:23
To: Anthony de Garr Robinson
mc GRO
Ce: Andrew Parsons +. GRO Katie Simmonds ¢
Subject: RE: KEL analysis [WBDUK-AC.FID27032497]
Dear Tony and Simon,
Thank you for your email.
The analysis is being carried out for the dominant purpose of the litigation. Taking the Coyne KELs as an example,
we've produced a table which sets out Coyne's analysis and asked Fujitsu to provide their own analysis in response.
We are going through the process of polishing what FJ have provided and want to asset privilege over all but the final
draft
Andy wondered if it would make a difference if we annexed the table to the statement, rather than exhibiting it?
We note the risk involved with using Gareth as a witness and we are limiting Gareth's involvement as much as
possible, but he is Fujitsu's go-to person for many of our questions. If Torstein or Steve covered the bugs they would
still need to speak to Gareth (Torstein less so).
Kind regards
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Jonny
Jonathan Gribben
Managing Associate
Womble Bond Dickinson (UK) LLP
‘Stay informed: sign up to our e-alerts
WOMBLE womblebonddickinson.com
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From: Anthony de Garr Robinson {.. . GRO. ~ ed
Sent: 12 November 2018 14:00
To: ‘Simon Henderson’; Jonathan Gribben
Cc: Andrew Parsons; Katie Simmonds
Subject: RE: KEL analysis [WBDUK-AC.FID27032497]
Dear Jonny,
l agree with Simon’s views below. Two questions arise in my mind, though.
First, I would like to understand whether there is any particular category information in which you would
like to retain privilege. If we are adducing evidence of any analysis undertaken of any data available, I don't
see how it would be possible to assert privilege either in what the analysis involved (what assumptions were
made, what judgments were formed, what calculations were done, etc) or on the information/data on which it
was based. If we want to rely on the conclusions of the analysis, we have to be open about its elements;
otherwise, the claimants would not be able to challenge it, which would not be fair to them. But is there
some specific category of information you want to protect which they might not need in order to be able to
challenge it? If so, let us know what it is.
Second, I see that Gareth Jenkins is part of the team doing the analysis. We all know the reasons why we
have decided not to have Jenkins as a witness. They are also reasons for not having him as a source of
evidence — i.e. as a source of information for our witnesses and/or as a person providing analyses on which
our witnesses will rely. Where he is acting as a source the Claimants will know this and they will waste no
time in arguing (1) the fact that we have not called such a natural witness demonstrates that he is not a
reliable witness, (2) we recognise this fact and want to protect him from any cross examination and (3) if he
is not a reliable witness, he can’t be a reliable source of evidence, either and (4) as the claimants are being
prevented from cross examining him the information he provides to other witnesses is even less reliable than
a witness statement from him would be. This argument will undermine the evidential value of any witness
statements that are based on information that Jenkins has provided.
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It follows that we should limit Jenkins’ involvement as a source of evidence as much as possible, essentially
to those areas where there is no alternative source of information. However, the man seems to be popping up
on ever technical question — as a source of information for Torstein Godeseth and now as a member of a
team providing analysis for Steve Parker. I appreciate his unique position and that there may be some areas
where we have no alternative but to use him as a source of information. But are we sure that we are limiting
his involvement as much as possible? I entirely recognise the need to be realistic about the sort of evidence
we can get from Fujitsu in the time available to us. But I need to make clear the risk we could be running of
adducing evidence which turns out not to be very useful to us.
On the same theme, I see from your email of 9:52 am that Steve Parker will not be covering the known bugs
in his witness statement. You say that Godeseth is better placed to deal with those bugs, but my
understanding is that he has no personal knowledge of the bugs or the processes by which they were
identified, investigated and fixed: this was not his department. In his last statement, he seems to be doing
little more than repeating information provided by others (others such as Jenkins). The claimants may
choose not to challenge this evidence, but if they challenge it I’m unclear how Godeseth will be able to
defend it. Again, I recognise the need to be realistic but also need to make clear the risk involved.
Best wishes,
Tony
From: Simon Henderson <Lssencses0c-
Sent: 12 November 2018 10:04
To: ‘Jonathan Gribben'
i
“p; Anthony de Garr Robinson
“GRO “I Katie Simmonds <f GRO
Subject: RE: KEL analysis [WBDUK-AC.FID27032497]
Jonny
Thaven’t had a chance to discuss this with Tony but my view is that the overall approach i.e. recording that
he has asked his team to do the work, is fine but that it is very likely that privilege (if indeed there is any
privilege) will be waived. This is an exercise which a third party witness is saying he has asked his team to
perform i.e. it is not something which, at least on the fact of the ws, PO’s lawyers have asked for — and even
if they have, by including the output of that exercise in a ws, I think any privilege e.g. in how the exercise
was carried out, is likely to be waived. It certainly cannot be assumed that we can pick and choose what we
present (since that could plainly be misleading) and more generally I think it will have to be assumed that the
way in which the investigation is carried out and the detail of its findings, will be disclosable.
Best
Simon
From: Jonathan Gribben } ____GRO - ]
Sent: 12 November 2018 09:47
To: Anthony de Garr Robinson ¢
“} Simon Henderson
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Ce: Andrew Parsons < >; Katie Simmonds <{_
Subject: KEL analysis [WBDUK-AC.FID27032497]
Dear Tony and Simon,
As you know Fujitsu are in the process of analysing: (1) the KELs referred to in Coyne's report; and (2) Robert's
sample of 50 KELs.
The analysis is being carried out by several people in Steve Parker's team plus Gareth Jenkins. It would not have
been possible for Steve to review all of the KELs himself in the time available and by his own admission he has been
in management since 2010 so his technical knowledge is not as it once was.
Our plan is to introduce the analysis in Steve's statement by saying something like "/ have asked my team to analyse
certain KELs and their output is at [page XJ." We'd be grateful for your thoughts on that approach and. in particular,
whether there is any risk of privilege over how the analysis was carried out being waived?
Kind regards
Jonny
Jonathan Gribben
Managing Associate
Womble Bond Dickinson (UK) LLP
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