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Witness name: Simon Recaldin
Statement No.: WITNO9890600
Dated: 4 September 2024
POST OFFICE HORIZON IT INQUIRY
SIXTH WITNESS STATEMENT OF SIMON RECALDIN
1 I, Simon Recaldin, of 100 Wood Street, London, EC2V 7ER, will say as
follows:
INTRODUCTION
2 I am employed by Post Office Limited (“Post Office”), as the Director of
the Remediation Unit (“RU”) (previously also referred to as the Historical
Matters Business Unit ("HMU")). I have held this role since 10 January
2022. My line manager is Post Office’s Interim General Counsel for the
Inquiry and RU.
3 My role includes managing the delivery of the Horizon Shortfall Scheme
(“HSS”) (previously known as the Historical Shortfall Scheme), criminal
appeals process and consequent civil liability and redress issues, internal
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and external communications and oversight of matters relating to the
Remediation schemes and payment of redress.
4 The RU was established to centralise redress and criminal appeals related
work emerging from the outcomes of the Common Issues Judgment and
the Horizon Issues Judgment (the “Group Litigation Judgment”) and
settlement. As RU Director, I chair the Horizon Matters Committee ("HMC")
which reports into and obtains authority from the Remediation Committee
(“RC”) which is a sub-committee of the Post Office Board (“Board”).
5 The HMC and RC are responsible for the decision making of the RU in line
with the RU Delegated Authority Matrix which outlines the delegated
authority through a governance process. I brief Post Office's Senior
Executive Group (“SEG”) and Board on matters considered by the RC.
6 I make this statement on behalf of the Post Office. Except where I indicate
to the contrary, the facts and matters contained in this witness statement
are within my own knowledge. Where any information is not within my
personal knowledge, I have identified the source of my information or the
basis for my belief.
7 I make this witness statement in response to a request dated 12 June 2024
for information pursuant to Rule 9 of the Inquiry Rules 2006 regarding the
HSS. Post Office has been asked to consider a range of information and
data relating to the 4,323 applications received by the HSS in responding
to this Rule 9(56). I confirm that every effort has been made by the Post
Office to produce the data which is required to respond as fully as possible
to the Rule 9 request. There are also some questions from Nick Read’s
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Rule 9 request that were not within his personal knowledge to answer that
I have responded to herein where they are within my knowledge.
The Inquiry’s Rule 9 request dated 12 June 2024 asked for the statement
to address the following:
What themes or trends can be identified from the data?
What actions have been taken or are being taken to address any issues
arising from these themes or trends (if any), for example:
(a) I What types of matters have progressed more quickly than others
and why?
(b) I Have there been delays at specific stages of the process?
(c) What measures have been implemented to address these delays?
For the avoidance of doubt and as agreed with the Inquiry, the applicable
date range is from the launch of the HSS on 1 May 2020 to 31 May 2024,
unless specified otherwise. The data requested by the Inquiry has been
predominantly sourced from Relativity (the case management system used
for the HSS) and supplemented where necessary from additional data
sources, such as Excel spreadsheets held by both Post Office and from
Herbert Smith Freehills (‘HSF”) (Post Office’s legal advisors who provide
the operational support to the HSS).
The data collation and analysis has been delegated to my colleagues in
the RU Data and MI Team.
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I appreciate that the history and features of the HSS are already well-
known to the Inquiry, including as set out in the Chair's Progress Update
on Issues relating to Compensation dated 15 August 2022 (“Interim
Report”), at paragraphs 13 to 45, and Post Office’s previous written
submissions to the Inquiry,’ which are not repeated in this statement.
Therefore, I intend to give only a very brief overview of the HSS and provide
an update to the Inquiry on matters which have occurred in respect of the
HSS since the last compensation hearing on 27 April 2023.
It should however be noted that in respect of the questions that I have been
asked, the timelines for the creation of the HSS and how and why various
parts of the process took, at certain points, time to stand up are crucial to
understand. Without this context, the statistics and data trends I share with
the Inquiry in this statement do not properly explain how Applicants’ cases
have been assessed and offers made.
The following table summarises the data up to the end of May 2024 being
provided to the Inquiry and are set out in line with key steps of the process.
The footnote discloses more recent numbers.
‘ Dated 8 April 2022, 31 May 2022, 5 July 2022, 1 December 2022 and 6 April 2023,
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HSS Summary at end May-24
Applications Received and logged * 4,323
Eligibility Work in Progress 896
(7% of completed Eligibility
Applications Ineligible 233
Assessments)
(93% of completed Eligibility
Applications Eligible 3,194
Assessments)
Offers Sent * 2,720 (85% of Eligible Applications)
No response to Offer 52 (2% of Offers sent)
Applicant in contact / querying 37 (1% of Offers sent)
Disputes 383 (14% of Offers sent)
Offers Accepted * 2,248 (83% of Offers sent)
Settlements * 2,085 (93% of Accepted Offers)
Settlement (£) * £109.0m £52,261 Average paid per Offer
Tax Top Ups to HSS Applicants * £13.0m
Combined total paid * £121.9m
Note * Updating these numbers for the position at 22-August 2024:
e 4,628 Applications received and logged.
e Eligibility backlog has been largely processed, with 200 in Eligibility stage being a
Work in progress.
e 2,751 Offers sent, of which 2,282 (83%) accepted.
e 2,270 (99%) Offers paid (£124.8m plus £14.5m Tax Top Ups totals a combined
£139.3m)
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HSS DEVELOPMENTS
14
In response to feedback from various sources”, Post Office sometimes, in
collaboration with DBT, revisits decisions made in the HSS. This is to
ensure that it is (i) operating fairly, efficiently and effectively to deliver full
and fair redress for Applicants and/or (ii) to provide more consistency with
other redress schemes — for example the Group Litigation Order Scheme
(‘GLO Scheme”) run by DBT. Some of these decisions are detailed below.
Fixed Sum Offer
15
On 13 March 2024, Government announced that it was extending the GLO
Scheme's redress payment of £75,000 to all eligible Applicants in the HSS
(the “Fixed Sum Offer’) to expedite redress. The offer will be made to three
distinct cohorts of Applicant:
(a) Initially, those who have already settled for less than £75,000 in full
and final settlement (excluding any tax top up) will have their redress
payments topped up to £75,000 to bring them in line with the
approach taken for members of the GLO Scheme (“Top-Up
Payment”). The Top-Up Payment process launched on 9 August
2024, with all letters due to be sent by mid-September. Payments
? Such as either Applicants, their legal representatives, the media, the Government Select Committee, Postmasters,
Department of Business and Trade ("DBT”) Officials, the Minister, the Horizon Compensation Advisory Board
(‘HCAB’) or the Inquiry.
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are already being made to Postmasters and Postmistresses
(‘Postmasters”) who have accepted the Top-Up Payment offer.
(b) I Secondly, the offer will be made to those HSS Applicants who have
received an offer for less than £75,000 but who have not yet settled
their claim.
(c) Finally, Post Office will send a mailout to all former and existing
Postmasters who have not yet applied to the HSS (or any other
scheme) or who applied but withdrew or did not pursue their claim.
It is anticipated the contents of this letter will:
(i) Communicate the availability of the Fixed Sum Offer and a
simplified process for application;
(ii) Set out that if the sum claimed exceeds £75,000 (including
consequential loss), Applicants can opt to have their claim
assessed using the current HSS process; and
(iii) I Potentially confirm the availability of a DBT run HSS appeals
process which is, at the time of writing this statement, not
formalised and still under consideration by Government.
16 Applicants accepting the Top-Up Payment or Fixed Sum Offer
acknowledge that by accepting the payment, they will be foregoing their
ability to apply to any future appeals process which the Government may
launch.
17 In devising the final application process for the Fixed-Sum Offer, the RU
are incorporating feedback received to date to improve the clarity and
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useability of the documents sent to Postmasters. Post Office is in the
process of producing a shorter, simplified application form, together with
enhanced information and guidance on Consequential Loss
(UKGI00033420), the establishment of a Postmaster Contact Centre
(detailed below at paragraph 34) and Post Office will have Service Level
Agreements (“SLA”) setting out when Postmasters should expect to
receive their redress payments. It is anticipated these will be incorporated
into the process in September 2024.
Tax top up payments
18 The tax methodology is tailored to each scheme according to legislation
therefore, it is not within the control of Post Office. In accordance with
HMRC rules, HSS payments (excluding the Fixed Sum Offer and Top-Up
Payments) are subject to different categories of tax, depending on the
particular circumstances of the individual Applicant, along with a need for
some Postmasters to file a self-assessment tax return.
19 Where the current tax regime causes issues within the HSS, Post Office
will raise this with DBT and endeavour to effect change, where possible.
For example, an issue was identified where Postmasters claiming taxable
heads of loss, particularly those with larger claims, may be taxed at a higher
rate due to receiving redress in a lump sum as opposed to receiving income
over the period of the claim. Post Office raised this issue with DBT so that
possible solutions could be considered collaboratively. On 19 June 2023,
Government announced that Postmasters who had received full and final
settlement of their claim would receive tax-exempt top-up payments (“Tax
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Top-Up Payment”). These payments ensured that the amount of redress
received was not unduly reduced by tax by treating all Applicants as basic
rate taxpayers for the purpose of this payment.
Since March 2024, Post Office provides up to £1,200 (including VAT) to
Applicants to assist them with filing their self-assessment tax return.
As at 31 May 2024, 1,803 Tax Top-Up Payments (totalling £13m) have
been made, and 92% of Applicants who have accepted their offer have
been offered a Tax Top-Up Payment. There are 184 settled claims (the
remaining 8%) which have not yet received a Tax Top-Up Payment, which
relate to complex Applicants including insolvency cases, dissolved
companies and limited companies, which are being progressed. In
addition, there are 242 cases (circa 9% of all offered cases) that are in
dispute where, due to settlement being awaited, Tax Top-Up Payments
have yet to be made.
Interim Payments
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23
24
From the outset of the HSS, Applicants in poor health or financial hardship
were able to request an interim payment of up to £10,000 while their claim
was being assessed.
Recognising this sum may not be sufficient, the level of Interim Payments
was increased. The requirement for an Applicant to be suffering hardship
to be eligible for an Interim Payment was removed in October 2022.
Applicants can apply for an interim payment at the Pre-Offer stage. Post
Office will consider making an interim payment in advance of sending a
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final outcome letter having confirmed eligibility and having completed a
Shortfall Analysis.
Since July 2023, Interim Payments of up to 100% are available to
Applicants who have received an offer.
Legal Representative fees
26
27
28
On receipt of an offer letter, Postmasters were previously entitled to £1,200
(including VAT) for legal advice regarding the terms of the offer where the
offer made was less than the sum claimed and £400 (including VAT) where
the offer was for the entirety of the sum claimed or more. Following
feedback from Postmasters, this cap was removed from all offers made
from 10 October 2022 and since that date, Postmasters are entitled to
reasonable legal fees.
The average legal fees claim prior to 10 October 2022 was £3,044, and
after that date it was £4,575.
When considering the HSS process to be implemented, it was not expected
that claims would be overly complex, involve so many different heads of
loss nor that there would be great volumes. Post Office wanted a scheme
with a low evidential bar and one that put Postmasters to as little
inconvenience as possible. Therefore, it was considered that legal advice
would not be necessary at the application stage to ensure full and fair
redress. Following a fixed amount for legal fees at the offer stage and
feedback from Postmasters and legal representatives, the HSS introduced
payment of reasonable legal in October 2022 and for expert fees in March
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2023 aligning the DRP (“Dispute Resolution Procedure”) costs
allowances with the GLO Scheme.
DRP Improvements
29
30
DRP initiatives have, and continue to be, implemented to help reach
resolution and full and fair settlement more efficiently. These include
changes to the HSS processes, shorter follow up timelines, the availability
and provision of the Fixed Sum Offer and an increased delegated authority
from Government. The latter enables me to approve settlement figures
without the need to seek Government’s approval thereby allowing the
Applicant to resolve their case without unnecessary delay.
Post Office has realised that there is significant benefit to meeting with
Applicants and/or their legal representatives face to face in an attempt to
bring the claim to a satisfactory conclusion within a shorter timeframe. As
such, Post Office offers face to face Escalation Meetings to all DRP
Applicants, in their preferred location, with the aim of solving claims at, or
shortly after, the meetings. Post Office has learnt that meeting with the
Applicants in person is more beneficial for all parties.
Dissolved Companies
31
On 10 January 2023, Post Office amended its Eligibility Criteria
(POL00448027) to allow claims from now-dissolved companies. This
cohort were previously deemed ineligible for the HSS pursuant to the case
assessment principles on the basis that there was no legal entity to receive
the payment. Following the change in criteria, Post Office wrote to the
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Applicants who had been told that their claims were ineligible to invite them
back into the HSS. At the time of writing, since 6 April 2023 Post Office has
received 57 applications from now-dissolved companies. To date, 19 out of
57 Applicants have accepted an offer and payment has been made, 19
Applicants have received an offer and are either in the DRP or considering
acceptance and 19 Applicants have not yet received an offer. Of the 19,
who have accepted, there was a delay between the offer being accepted
and paid as Post Office had to seek a waiver from the Crown Estate Bona
Vacantia team before payment could be made. Post Office apologise for
the delay resulting from the additional required waiver process.
Postmasters with criminal convictions
32 In June 2024, it was agreed that Postmasters who had been convicted of
anon-Horizon related crime could now apply to the HSS as they could have
experienced shortfalls for which they could claim and may not be eligible
for any other scheme. These Postmasters had previously been excluded
from the HSS as the case assessment principles governing this cohort
referenced only Horizon-related criminal convictions as opposed to
including non-Horizon related criminal convictions. This ensures that all
Postmasters who may have been impacted by shortfalls are able to apply
to the HSS for a redress payment and all eligible losses are fairly
redressed. As of 7 June 2024, eight such Applicants have been identified
and Post Office have now written to all of them confirming they are now
eligible for the HSS.
Postmasters who were subject to civil proceedings
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Following work between November 2022 and March 2023 on the case
assessment principles to be used by the Panel for assessing malicious
prosecution and caution claims in the HSS, the Panel decided to
proactively revisit their previous decisions on cases involving civil
prosecutions to satisfy themselves that their previous assessment of those
heads of loss had been fair. Across two Panel sessions in August 2023, the
Panel considered whether the previous offers given to ten Applicants
whose cases involved redress for those heads of loss remained fair. On 2
February 2024, these ten impacted Applicants received further offers in
addition to their original offer.
Postmaster Contact Centre
34
Post Office have introduced a Postmaster Contact Centre for Applicants to
contact and seek information and progress their case. This went
operational in September 2024. Post Office hopes that for some Applicants,
providing them with an empathetic person at the end of a telephone with
whom they can build a rapport and who will listen to their personal
testimony may help them feel able to articulate their losses more clearly
and give them useful guidance regarding the process.
Restorative Justice Programme
35
Since May 2023, Post Office has held restorative justice meetings with
Postmasters across all schemes, including the HSS, around the country.
These meetings are deliberately informal and involve an initial introduction
of those in attendance followed by an opportunity for the Postmaster to tell
their story and raise their own personal experiences and concerns. The
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meetings are also an opportunity for the senior Post Office executive
(including Board members and SEG members) to listen and to personally
apologise to each individual. They are not legal meetings and are an
opportunity for the Postmaster to speak freely without a Post Office lawyer
being present. Applicants are entitled to have their own lawyers present,
should they wish to do so. The meetings are a listening exercise for Post
Office and are not related to the ongoing claim put forward by the
Postmaster although, should the Postmaster raise a claim related matter,
this will be considered by Post Office and followed up on where required.
The Postmasters are generally briefed beforehand by their legal
representative (if they have one) in order that they can prepare if they want
to do so. Some Postmasters make requests for practical help, such as
asking for an employment reference or asking for Post Office’s assistance
for the Postmaster to attend the Inquiry. Post Office endeavours to facilitate
these requests wherever possible and, for example, provided costs for
travel and accommodation for a Postmaster who wanted to attend the
Inquiry but lived a long way from London. It is also a good opportunity for
Post Office executives to hear first-hand the experiences of the
Postmasters to learn how they have each been impacted in order to
understand the wide reaching and long-lasting effects of the scandal on
each person and their families and to learn lessons for the future.
The feedback we have received about the restorative justice meetings has
been positive and it seems to be a cathartic process for many of those
involved.
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At the time of writing 64 (of which 12 in HSS, 44 in the GLO Scheme and
eight in the OC Process) restorative justice meetings have taken place to
date, and I have attended each one. These are understandably charged
and emotional events but one thing that is clear to me, is that financial
redress alone cannot fix what has happened to these individuals. I hope
that these meetings go some way to help victims of the scandal. Following
these meetings, I ensure that each of the victims’ experiences are shared
with the Executive Team. I am inspired by the strength and power of the
Applicants I have met. I am truly humbled by their explanations of what
they have been through.
HSS Developments as a result of listening to feedback
39
As a result of feedback received from various key stakeholders including
those listed at paragraph 14, Post Office has implemented the below
developments to the HSS.
HSS name change
40
Post Office changed the name of the HSS on 7 July 2023 to the 'Horizon
Shortfall Scheme’. This followed feedback from Members of the HCAB and
Postmasters that the word ‘Historical’ was considered inappropriate and
offensive to some former and current Postmasters insofar as it suggests
the suffering of Postmasters affected by the Horizon scandal is in the past.
Post Office did not intend any offence by the use of the word ‘historical’ and
as soon as we heard the concerns regarding the name, it was amended.
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41 Post Office issued an update regarding the name change on the webpage
along with an apology.
Redress change
42 Another change that has been implemented as a result of Postmaster
feedback is that Post Office does not refer to Postmasters being
compensated nor that the schemes provide compensation. Instead, Post
Office now refers to Postmasters receiving redress.
Use of the term ‘Without prejudice’
43 Views were expressed by public commentators, and latterly, the HCAB that
the use of “without prejudice” labels on HSS offer letters were, in some
cases, incorrect and the use of such labels was perceived to restrict
Applicants’ ability to freely discuss their offers. Although Post Office
believed it was accepted standard practice to label offer letters which offer
financial redress as “without prejudice” we are ultimately more concerned
about the views of Applicants.
44 Since 1 March 2024, all offers have been marked as open, and not subject
to without prejudice privilege, so that Postmasters can discuss the offer
and its terms with whomever they choose to or, to keep them confidential.
Whatever Applicants decide, Post Office continues to keep all offers
confidential (unless it needs to share them for legitimate reasons or where
it is compelled to do so by law). The DRP continues to be covered by
without prejudice privilege as set out in the HSS Terms of Reference
(POL00448026), although any offer which is made following any part of
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that process is open. Any Postmaster in possession of an offer sent to them
before 1 March 2024 is able to share it with anyone they choose.
HSS BACKGROUND
45
46
47
The HSS was launched on 1 May 2020, with a basic framework of
documents. It is a voluntary remediation scheme which came into
existence following the settlement of the Group Litigation. It offers
Postmasters the opportunity to seek repayment for any losses they
incurred due to shortfalls related to the legacy Horizon IT systems,
sometimes referred to as Legacy Horizon, Horizon Online or HNG-X.
These losses include what are known as ‘Horizon shortfalls’ as well as any
additional consequential losses suffered by Postmasters. The Terms of
Reference for the HSS are exhibited (POL00448026) and the Eligibility
Criteria are exhibited (POL00448027).
Parts of the HSS are administered by HSF who provide legal and
operational services including providing legal advice to Post Office,
completing legal case assessments for all eligible applications. HSF also
maintain responsibility for the administrative arrangements for convening
Panel meetings, sending meeting invitations, receiving applications and
managing the platform which holds the HSS data.
Post Office considers that the HSS is a more informal and open
environment than a legal route which seeks to provide redress would be.
There are no limitations to the HSS in relation to heads of loss, provided
that those losses were caused by Horizon shortfalls, or are consequential
to those shortfalls; and are compensatory in nature.
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The HSS will consider heads of loss and information provided by an
Applicant as defined in their application form. Redress provided in the HSS
however, is regrettably only financial and cannot undo the suffering and
traumatic experiences Postmasters endured. Post Office has implemented
mechanisms to allow for appropriate, full and fair redress including that the
sums claimed by Applicants are assessed by an independent Panel
comprised of legal, retail and accountancy experts, which makes
recommendations to Post Office on the offers to be made. This mechanism
ensures independence and a consistency of recommendations across
cases.
The involvement of HSF ensures that the Panel works independently from
Post Office. However, even though HSF provides options to the Panel on
each head of loss, these do not include recommendations on the level of
offer. Decisions as to the level of offer to be made are strictly for the Panel
to determine within their recommendation.
To promote independence, the Panel was established by HSF and the
appointment of the individual members noted by the Board. As RU Director,
I was informed as to who the members of the Panel were once they had
been appointed. I understand that the individuals who sit on the Panel are
all very experienced individuals and I believe that they have sufficient
capability to assess complex claims. I was also reassured by the HCAB
having met the Panel members and reporting that they were impressed
with their level of expertise and understanding of relevant issues.
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Post Office considers that it has taken all reasonable steps to engage with
Postmasters who may be eligible to apply to the HSS. When the HSS
launched on 1 May 2020, Post Office wrote to circa 7,100 current and
20,000 former Postmasters setting out the details of the HSS and inviting
Postmasters to apply. Post Office also updated its website and, in May
2020, arranged for publications in four national daily newspapers, 26
regional newspapers, 404 paid weekly newspapers, 98 free weekly
newspapers and 33 local daily newspapers.
The HSS was initially open between 1 May 2020 and 14 August 2020, with
an extension for Applicants in exceptional circumstances (such as them
dealing with major life events or incapacitated through illness) until 27
November 2020. By 6 October 2022, 230 later applications had been
received therefore, the decision was made to allow these later applications
and subsequent applications to be processed (“Later Applications”). By 8
December 2022, Post Office had delivered 94.5% of offers to Applicants
who applied prior to the original HSS closing date.
As at 22 August 2024, 4,628 HSS applications have been received of which
2,751 have received offers and 2,282 (83%) have accepted the offers.
HSS OVERVIEW AND PROCESS
54 We set out below an overview of the operation of the HSS and provide a
brief explanation of each of the HSS’ stages. This explanation is necessary
to understand the data trends analysis that is set out from paragraph 150
below.
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Allclaims, save for Below Assessment Threshold (“BAT”) claims, follow the
lifecycle detailed from paragraph 61 below unless the claim is withdrawn
or suspended.
BAT claims are considered low value, simple claims for the purposes of the
HSS. These claims are processed without the need for a Shortfall Analysis
(being the process of actually finding the shortfall in the legacy system) or
legal case assessment which is carried out by HSF.
It should be noted however that these initial time frames also encompass
the period from HSS launch until funding was confirmed by DBT which took
nine months, together with the test case period (which was a condition of
funding) when consequential loss heads were being worked through with
the Panel. Until the funds were available, Post Office was unable to send
offers to Applicants and therefore this timeframe is not indicative of the
actual time that more simple claims take to process. However, as soon as
the funding agreement was in place on 18 March 2021, BAT offers were
issued and by the end of March 2021, 416 BAT offers had been issued.
For the purposes of this statement, claims are described as BAT, standard
claims which are claims with five heads of loss or fewer and none of the
complicated heads of loss* (“Standard Claim”) and complex claims which
are greater than five heads of loss or one or more of the more complicated
heads of loss (“Complex Claim”).
° Complicated Heads of loss are: Fatality, Malicious Prosecution, Termination, Insolvency, or Psychological Harm
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59 The process outlined below is how an application is designed to progress.
However, I understand that applications do not always follow through these
stages sequentially. At various stages within the process, an application
may present issues which require further information or clarity from other
stages within the process flow. Consequently, the process is treated with
some degree of flexibility.
60 In order to assist with progressing claims, communications with Applicants
and/or their legal representatives is very important. Post Office keeps
Applicants updated via the webpage and there is also a facility which allows
Applicants to email in any questions they may have. This inbox is monitored
daily by RU’s operational team and HSF and a response is provided in
most cases within 24 to 48 hours, depending on the complexity of the
question. In relation to the DRP, regular meetings are held with legal
representatives in order to discuss progress of claims and case reviews.
Receipt and logging of Applications
61 Post Office receives an application to the HSS either by email or by post,
following which the claim will be logged in a data collecting system called
Relativity. Once logged in Relativity, an acknowledgement is sent to the
Applicant.
Triage
62 Claims are assessed to check Post Office has the minimum requirements
including: a signed application form (either by the Applicant or a
representative of the correct legal standing if the Applicant is incapacitated
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or deceased) and proof of identity and address. The signed application
form confirms the Applicant is bound by the HSS Terms of Reference
(POL00448026).
Eligibility
63
64
65
Eligibility checks are undertaken in line with Post Office’s Eligibility Criteria
(POL00448027). An eligible or ineligible letter is then issued to the
Applicant to inform them whether or not their application to the HSS can be
progressed. Whilst there is no formal appeal process for ineligible
determinations, the decision letter which is sent to Applicants explains the
reason for the decision and why the Applicant is deemed ineligible.
Postmasters are invited to write to Post Office if they disagree with the
decision, setting out the reason for this and providing any further
information they have to assist Post Office with reconsidering the position.
If further information is provided, the decision will be reconsidered.
For all non-BAT claims, from the eligibility confirmation letter being issued
it takes an average of 470 days to an offer letter being issued. In respect
of Complex Claims, this process takes an average of 514 days improving
to 306 days in 2024 although we note a lower volume of offers were issued
in 2024.
For Standard Claims, this process takes an average of 445 days and the
data shows that this has decreased in 2024 with Standard Claims now
taking an average of 302 days.
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For BAT Claims, the average timeframe is 176 days, but the majority of
these claims were received at the earlier stages of the HSS and the
timeframe for completion of these claims was affected by the time taken for
DBT to confirm funding and incorporating the test case process.
Paragraph 150 below contains the relevant data in relation to Eligibility
Assessment.
Requests for Further Information (“RFIs”)
68
69
70
From the outset of the HSS, the RFI process has been a key element in
the fair assessment of claims albeit it is also a significant contributor to the
number of days a case takes to be processed. HSF reviews each
application to determine whether any further information would be helpful
to the Panel while they are putting together the pack for the Panel.
Obtaining as much information as possible for an Applicant needs to be
balanced with the risk of sending lengthy RFls on losses which are
irrelevant to the claim, setting false expectations on potential heads of loss
which may not be applicable and delaying an Applicant's access to redress.
One of the key documents is the legal case assessment which is split into
each head of loss and gives the Panel all the evidence available, together
with the relevant legal and case assessment principles to allow the Panel
to discuss the issues and make an appropriate recommendation.
The HSF case assessor will consider whether the Panel may find more
information or evidence from the Applicant in relation to expressly claimed
heads of loss helpful to further build the claim. In addition, the case
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assessor might observe other heads of loss that have not been detailed
fully enough and consider that if further information was supplied by the
Applicant, there might be the possibility of a higher offer.
In these scenarios, HSF will issue an RFI to the Applicant. RFls improve
the evidential basis of a claim, and ultimately the amount of the potential
redress, that will be considered by the Panel. If there is a small amount of
information in the application, but not enough for a head of loss to be made
out, and the Applicant has not claimed for it, the RFI process allows for
targeted questions to be raised which can tease out extra heads of loss.
On receipt of the RFI, the Applicant's claim could expand or a different head
of loss could be made out which allows a better case to be submitted to the
Panel on behalf of the Applicant.
Paragraphs 173 to 177 below contain the relevant data in relation to RFls.
Shortfall Analysis (“SFA”)
73
74
Following a determination of eligibility, the claim review team within Post
Office will conduct a SFA by reviewing the application against Post Office's
internal records. The purpose of this process is to seek to validate that
shortfall losses have occurred in the relevant period. All of the cases are
reviewed by a Team Leader or someone with delegated authority.
Where there is evidence that a shortfall existed and was settled, and there
is no evidence that the shortfall was caused by something other than a
potential issue with Horizon, for the purposes of the HSS the presumption
is that the shortfall is a Horizon shortfall. For these purposes, the testimony
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of the Applicants is sometimes the only evidence available. There is a low
evidential bar given, as a result of Post Office’s own actions and the
passage of time, evidence may not be easily accessible and/or readily
available.
The SFA will include an analysis of the 12 months surrounding the alleged
shortfall (six months either side). In cases where the claim is unquantified,
the SFA will cover the Applicant’s entire tenure.
Once the SFA is complete, the application proceeds to a legal case
assessment. Paragraph 170 below contains the relevant data in relation to
SFA.
Legal Case Assessment
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78
The HSF case assessor reviews all documents contained in the Applicant's
case file, which may include a branch file and analyses all the information
provided by the Applicant and Post Office, including the SFA. The assessor
also scrutinises and tests the reports used and will ask for clarification of
calculations or figures if they cannot ascertain how the figures have been
arrived at.
HSF will then prepare a comprehensive assessment for each separate
shortfall claimed and all consequential losses, outlining the merits and any
deficiencies for each claim. Consistency of approach is created by the team
adhering to agreed methodology and legal principles and draft
assessments are reviewed by various stakeholders within Post Office.
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Having compiled the information gathered from the SFA investigation and,
the information provided by the Applicant and Post Office, the assessor
sets out the assessment and provides the Panel with a set of options for
each claimed head of loss. HSF will only provide options based on the
agreed legal principles and the HSS Terms of Reference (POL00448026).
During Panel meetings, however, they may note where similar awards have
been made on previous cases and alert the Panel to those awards so as
to ensure consistency.
HSF will look at consequential losses resulting from shortfalls at the same
time as considering the shortfalls and provide this analysis in their
assessment which is given to the Panel. HSF's brief is to operate the HSS
to ensure that Post Office meets all its obligations under the GLO
Settlement deed. As part of that, case assessors work to identify each
potentially relevant head of loss regardless of whether or not one has been
specifically claimed by the Applicant and set out the case in the best way
possible for the Applicant.
This will all be compiled in a pack with the application and RFI responses
which will then be given to the Panel to consider. The pack compiled by
HSF sets out the relevant information to allow the Panel to make
recommendations on the various heads of loss. The Panel will then also
take a final, holistic view of the case as a whole and ensure that they are
comfortable that their overall outcome is fair, in all the circumstances.
Ultimate decision making on final recommendations for each head of loss,
and the overall value of the claim, lies with the Panel.
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Paragraphs 171 to 177 below contain the relevant data in relation to legal
case assessment.
Independent Panel Assessment
83
84
85
For BAT claims, the Panel considered and made a recommendation in
respect of all such applications.
The Panel makes recommendations as to the offer to be made to the
Applicant pursuant to the Panel Terms of Reference (POL00448026) and
the Consequential Loss Guidance (UKGI00033420). The Panel receives
the cases to be considered at least one week ahead of each Panel
meeting. Following a review of the SFA section by Post Office, the Panel is
provided with the legal case assessment and the Panel pack for each of
the applications which HSF has allocated to that meeting. For any
particularly Complex Claims, more time is allotted and for some particularly
urgent cases, Panel has on occasion agreed to consider them less than a
week before the Panel meeting.
Panel's consideration of each application is as set out in their Terms of
Reference (POL00448026) and is guided by the case assessment
principles they developed for the relevant heads of loss during the test case
process and beyond through the assessment of other applications with that
head of loss. It is at the Panel's discretion to take into account any facts
and matters which the Panel considers will produce a fair result on the facts
of a particular application, as long as their recommendations are limited to
Horizon shortfalls or consequential losses of those shortfalls.
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An example of this is in the instance of a claim for ‘Distress and
Inconvenience’. Even where an Applicant has not sought a claim expressly
for this, if clear evidence of distress is apparent from the papers, the Panel
will look to make an award for Distress and Inconvenience.
Following the Panel's assessment, HSF will inform Post Office on the
proposed outcome of the application and present the case to it. If required,
Post Office can instruct HSF to raise questions with the Panel. DBT is kept
informed of Panel recommendations and can raise questions for HSF or
the Panel to answer. Post Office will make a decision based on this
recommendation. HSF then prepare a draft outcome letter, which the Panel
review and amend/approve. As part of that review, Panel members again
step back to consider whether the recommended offer is fair and have on
occasion revised their recommendation at this stage.
On average, it takes 37 days from the Panel recommendation to an offer
being sent. This time period can include, for example:
(a) I Governance steps (sign off by Post Office or DBT);
(b) — Additional queries to be resolved; or
(c) Resolving non-Horizon queries that the Applicant has raised
As at the date of this statement, there have been over 300 Panel meetings
covering over 3,000 recommendations. Paragraph 178 below contains the
relevant data in relation to the Panel.
Post Office Review
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Post Office review all Panel recommendations and the exceptions pre and
post-Panel which meet certain criteria, such as fatality claims, offers over
a certain quantum and where the case assessment principles may not be
met.
Post Office’s HMC Subgroup considers any issues on unusual or sensitive
cases and provides guidance to the operational team on how to progress
the case. I chair this group and am joined by other members of the RU
senior team, and RU legal.
Offer letter and payment
92
Once Post Office has confirmed the Panel’s recommendations, an Offer
Letter is issued to the Applicant. Post Office has never made an offer less
than the Panel’s recommendation but has, on rare occasions, increased it.
The Applicant has the option to accept or reject an offer.
Dispute Resolution Procedure
93
Throughout the lifecycle detailed above, there is a dispute resolution
process open to Applicants. The DRP is a four-stage process which was
designed to resolve issues regarding Horizon shortfalls and consequential
losses in the event that an Applicant was dissatisfied with the outcome of
their claim. The HSS offer letter to Applicants provides details of recourse
if they are dissatisfied with the outcome of their claim; referring them to the
HSS Terms of Reference (POL00448026).
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Upon entering the DRP, the case is assigned to a case manager who
reviews the disputed heads of loss and usually requests additional
information from the Applicant in order that the claim can be progressed.
AGood Faith Meeting is a meeting held, as soon as is practicable, between
at least one Post Office representative and the Applicant wherein the Post
Office representative will endeavour to resolve all issues regarding any
outstanding shortfalls and in a manner that takes into account the
legitimate interests of Post Office and the Applicant. The Good Faith
Meeting was designed to ensure that the Postmaster understood all the
information that had been reviewed by the Panel and understood exactly
how they had reached their conclusion.
Should the Postmaster still feel unable to accept the offer after the Good
Faith Meeting, a further meeting is offered, the Escalation Meeting, which
seeks to resolve the issues in dispute and allow both sides to try to reach
a resolution. It is sometimes akin to an informal mediation but without the
benefit of an independent third party. If Postmasters have instructed a legal
advisor, they would usually attend this meeting and Post Office will ask one
of the senior dispute managers to attend, along with a senior member of
the RU legal team, when the Postmaster is represented. During Escalation
Meetings Applicants provide additional and helpful context which Post
Office has found is not always drawn-out during video or phone Escalation
Meetings. As a result, and as set out in paragraph 30 above, face to face
Escalation Meetings are now offered.
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Once all of the information has been collated, usually after either the Good
Faith Meeting or the Escalation Meeting, the claim is reviewed by the DRT4
and the RU legal team to determine whether there is sufficient information
to return the case to the Panel or whether further information is required. If
there is sufficient information to return the case to the Panel, a
reassessment will take place at the earliest possible date to enable the
matters in dispute to be reconsidered with extra evidence.
If the dispute is not resolved at the Escalation Meeting, then either party
may refer the matter to Mediation. Mediations are provided by the charity
Wandsworth Mediation Service (“WMS") and the mediators are all qualified
and accredited and are led by Stephen Ruttle KC. The Applicant will not be
required to contribute towards the costs of the Mediation.
Post Office has now completed five mediations with Postmasters resulting
in a 100% mediated agreement and a further three meetings are scheduled
as at the date of this statement.
All Good Faith meetings, Escalation Meetings, and Mediations are carried
out on a confidential and without prejudice basis, to ensure each party can
engage in an open and meaningful fashion.
The fourth DRP stage is arbitration. The HSS Terms of Reference
(POL00448026) refer to disputes for sums totalling not more than £10,000
being resolved by recourse to civil proceedings in the County Court
4 The DRT is made up of caseworkers whose sole purpose is to liaise with Applicants and assist them through the HSS.
Once a caseworker is assigned to a claim, they remain with it throughout the DRP.
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pursuant to the Small Claims Track. With the introduction of the
Government's Fixed Sum Offer, no dispute will be for less than £10,000
and therefore the Terms of Reference (POL00448026) will be amended to
reflect this change.
Disputes for sums in excess of £10,000 shall be referred to and finally
determined by arbitration under the Arbitration Act 1996. Pursuant to the
Terms of Reference (POL00448026), the appointing authority shall be with
Stephen Ruttle KC, the number of arbitrators shall be one, the seat of
arbitration shall be London, England and the language of arbitration shall
be English. To date, there have been no arbitrations. Half of the arbitration
fees and the Applicant's own legal costs are paid by the Applicant.
Paragraphs 184 to 189 below contain the relevant data in relation to the
DRP.
THEMES IMPACTING THE SPEED OF REDRESS
HSS _ opened before processes, case assessment _principles, funding and
104
resource were implemented
Post Office committed to setting up the HSS as soon as possible following
the settlement of the Group Litigation. There were many aspects of the set-
up that had not been completed by the launch to allow cases to flow
through immediately (for example, processes determined and
implemented and completion of the test cases). The appointment of the
original Panel members took until June 2020 and until they were in place,
the HSS processes such as Terms of Reference (POL00448026),
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Consequential Loss guidelines etc could not be signed off and agreed. The
Panel necessarily had a major influence in the drafting of these documents.
Between May and November 2020, the categorisation and treatment
strategy for BAT claims was being agreed between Post Office and
Government.
Funding for cases and the corresponding operations agreement (to set the
conditions around funding) took many months of collaborative work
between DBT and Post Office. Sign off within DBT and Treasury was not
finalised until March 2021.
From July 2020 to March 2021, the RFI process discussed at paragraph
68 above, was developed and approved by Post Office, Government and
the Panel.
The test case process and the development of suitable case assessment
principles took many months to finalise. Sufficient time was required to
develop them and to allow for a process of consideration, governance and
sign off with Post Office and Government. The test case process began
with shortfall only cases from March to around August 2021. Consequential
loss cases then followed from around July 2021 to November 2021 for the
first set of consequential losses, with development of other heads of loss
during 2022 and 2023.
Unexpected high volumes and complexity of applications
109 Following receipt of 2,548 claims by September 2020, Post Office realised
that it was likely to receive a significantly higher volume of HSS applications
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than it initially anticipated. Once applications started to be received, Post
Office realised that it would not have sufficient funds to make the redress
payments. Post Office therefore required BEIS (now DBT) to provide
redress funding. It took much of the period October 2020 to March 2021 to
secure a funding agreement and agree an Operations agreement. Without
these documents in place, the outcome from the HSS could not be
communicated to Applicants therefore, the HSS continued to be developed
internally until the Government funding and operational documentation was
fully implemented.
110 In addition, it became apparent that certain aspects of some claims were
particularly complex and required significant legal and administrative
oversight, decision making and internal and external stakeholder
agreement. For example, HMRC oversight on taxation decisions and
Official Receiver on Bankruptcy and Insolvency regulations and approach.
It is regrettable that such third-party processes impacted the speed and
efficiency of the HSS.
111. In some cases, such as bankruptcy and now-dissolved companies,
completion of a complex third-party process to identify the correct
individual(s) was required. This also requires other creditors to be
considered. In terms of dissolved companies, for example, according to
legal principles, redress can only be paid once the company has been
reinstated. Post Office has subsequently relaxed this stipulation and now
pays to shareholders where possible. It is unfortunate that these third-party
processes resulted in a delay to the process.
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112 Post Office has established a process for claims from bankrupt Applicants
in light of the potential interests of bankruptcy or insolvency practitioners.
Consideration was given to The Insolvency Act 1986 which sets out what
falls within, and outside of, a person’s “bankruptcy estate” and
interpretation of this statute which has been subject to decisions of the
Courts since the Act was passed. Broadly speaking, when damages are
awarded by the Courts to a bankrupt, or former bankrupt person, those
damages are separated into two categories: (i) heads of loss which relate
to “financial losses”, for example loss of earnings, loss of capital value in a
business, the Horizon shortfalls etc; and (ii) heads of loss that are
“personal” to the Applicant in nature, for example personal injury, distress
and inconvenience, stigma, loss of reputation etc. Offers are therefore split
between the types of claim which fall within the bankruptcy estate and are
paid to the Official Receiver or Trustee in Bankruptcy, and those which are
payable to the Applicant.
113 In other cases, such as fatality claims and Postmasters who were
prosecuted but not convicted, it is difficult to quantify and assess the
amount of redress to be paid given the extent of the impact of the scandal
on their lives or in the case of the former, the lives of their families. In
addition, there was a requirement to ensure that the legal principles to be
strictly applied in such cases would be suitable to be applied in such
sensitive cases. Case assessment principles for fatality claims were some
of the last to be finalised as they involved specialist legal advice and in-
depth discussions with DBT as to the correct approach and process.
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Shortfall Analysis
The SFA is a lengthy process which involves reviewing multiple data
sources across many years; this can take a few days to a week to consider
and collate into a report. The resulting document, which contains only
information and not recommendations, is passed to HSF.
A review is currently underway to determine if any part of the SFA can be
automated to expedite the claim by not having to manually review a number
of data repositories.
Paragraph 170 below contains the relevant data in relation to SFA.
Later Applications
117
118
Until October 2022, when the HSS was opened to Later Applicants, Post
Office held any further applications until it was able to process them.
Between the original HSS closure date and October 2022, Post Office
received 230 claims and therefore began the next phase of the HSS with
a backlog which it needed to work through.
The funding available for the redress programme is reviewed regularly with
DBT and is amended as changes to the schemes and case assessment
principles occur. It was not until 3 October 2022 that the funding was
approved to allow Later Applications into the HSS. DBT funding for Later
Applications was considered sufficient until January 2024 when
applications increased considerably following the ITV Drama, ‘Mr Bates vs
the Post Office’ (the “Bates ITV Drama’).
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Following the airing of the Bates ITV drama series, Post Office saw a
further 1,345 applications received in the five months to May 2024, with
418 applications in January 2024, 350 applications in February and 267
applications in March. To put this into perspective, in the 14 months
between October 2022 and the end of December 2023, 394 Later
Applications were received in total.
As such, given the volumes of Later Applications, Post Office were not
resourced for this level of demand at this time. Consequently, HSF
increased its resource and by the date of this statement, the core team has
grown from 45 to c.70 and will further expand to 80 to deal with the
expected inflow of new applications. There continues to be circa 30 new
applications per week.
There are around 500 applications which may qualify for the Fixed Sum
Offer and these are currently being prepared so that as soon as the Fixed
Sum Offer is launched this cohort can be settled quickly. A review of these
applications suggests many of them may wish to accept the Fixed Sum
Offer — noting that statistically 85% (1,903 of 2,242) of settled claims to
date have been for less than £75,000.
Paragraph 153 below contains the relevant data in relation to Later
Applications.
Agreements pertaining to tax treatment, Interim Payments, Eligibility, Bankruptcy
and Insolvency
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Any HSS related decisions and/or recommendations are required to be
taken in accordance with the RU Delegated Authority Matrix. During initial
development of an approach or principle change in HSS, RU will discuss
and consult with DBT for general input ahead of taking decisions to HMC,
RC and Board as appropriate.
In certain circumstances, DBT have, and will, announce a change to the
HSS, such as the announcement of the Fixed-Sum Offer. Once announced
by Government, the details of this offer for example will be approved
through RU Governance however, in this example, there is significant
Government consultation and governance required before implementation.
DBT announced the Fixed-Sum Offer in March 2024, and at time of writing
this statement, RU awaits approval from DBT to commence communication
of the Fixed Sum Offer to Postmasters who are yet to accept an offer in the
HSS and to any new Applicants.
Legal Representation costs
125
126
Following on from paragraph 26 above, this legal funding was not available
during the application process or at any time pre-offer but only post-offer to
assist with the consideration, review and challenge, if any, of an offer that
has been made under the HSS.
Applicants and their legal representatives raised a concern in relation to
the lack of legal funding which, they stated, did not allow for equality of
arms between Postmasters and Post Office. They considered that
adequate funding was required for post-offer legal advice and provision of
disbursements to meet the cost of experts in order that the HSS can be
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fair. Consequently, in October 2022, Post Office agreed to adopt a
reasonable costs process with which the Government agreed.
Government now provides funding for reasonable legal costs. The number
of Applicants who have instructed legal representation is 316 (12%) out of
2,720 Applicants to whom offers have been made.
Some Applicants have instructed legal representation from the beginning
of their application process. While the data shows that this makes a
minimal difference to the Eligibility outcome, we have received
proportionately more Consequential Loss claims as a result. Although
available to all upon request, the data appears to show Legal
representation has also been a driving force in Applicants receiving an
Interim Payment.
Paragraph 183 below contains the relevant data in relation to legal
representation.
DRP
Post Office acknowledges it took too long to set this process up although
this was a brand-new process that had not been implemented by a
remediation scheme previously. This required a tailored approach which
took time.
When an Applicant rejects their offer, this is often the time when an
Applicant obtains legal representation for the first time which has meant
that in many instances further information is then presented for
consideration, and or new Heads of Loss introduced. This may result in
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further legal case assessment and Panel consideration. This can also lead
to requests for further information to help with the claim.
131 Examples of further information requests might include information from
medical records, or business accounts being required to help articulate the
dispute fully, and expert reports to substantiate a claim, all of which can
take time to obtain from third parties. Applicants need sufficient time to
provide the information being sought and then when it is received, the team
needs to consider it fully and present it for further assessment.
132 Instructing legal representation has on occasion happened as late as the
Escalation Meeting and mediation stage of the DRP. While it elongates the
time it takes to settle the claim, it is more important that Applicants have
confidence in the process and are comfortable that their settlement is fair.
133 Post Office apologises for this being a lengthy process; we have tried to
improve on the efficiency and effectiveness of meetings as we progress
including introducing more Applicant focussed conversations with a lawyer
in the room, particularly at Escalation Meetings (please see further
information on improvements to the DRP above). Post Office is engaging
well with the law firms who represent the Applicants to progress claims.
134 Progressing claims in the DRP is a current focus of Post Office and the RC
has agreed changes to the process and initiatives to speed the DRP up.
Post Office is aware that the DRP timing is an ongoing issue, and it
continuously looks for ways to improve the process. For example, the DRT
is currently working with the legal firm who represents the majority of
Applicants in the DRP to further categorise the issues in their cases and
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assist with more forensic and active case management. The aim is to
approach issues collegiately in order to progress cases.
Paragraphs 184 to 189 below contain the relevant data in relation to legal
representation.
Consequential Loss Guidance and Principles (“CL Guidance”)
136
137
In May 2020, Hudgell Solicitors sought confirmation on behalf of a number
of prospective Applicants about the approach the HSS would take to,
amongst other things, consequential loss and the difficulties which were
expected to arise in respect of the availability of evidence, or lack thereof.
As a result, Post Office engaged senior external counsel to comment
extensively on these issues including the approach to evidence,
consequential loss issues and the initial iterations of the CL Guidance
(UKGI00033420).
Around this time, the Panel was being set up and the Panel members being
appointed. The Panel then reviewed, and commented extensively, on
several drafts of the CL Guidance (UKGI00033420). On 16 September
2020, Post Office approved the CL Guidance (UKGI00033420) for
publication. They were approved by the Panel on 21 September and, on
30 September 2020, they were published on the HSS website. All existing
Applicants were informed of, and sent copies of, the CL Guidance
(UKGI00033420) in October 2020.
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For Applicants who applied to the HSS from October 2022, the application
form was amended to expressly refer to the CL Guidance
(UKGI00033420), which was annexed to the form.
With hindsight, it is regrettable that Post Office did not send the CL
Guidance (UKGI00033420) to the wider population of potential Applicants
(being the 27,100). However, had the HSS not been launched until the CL
Guidance (UKGI00033420) had been published, this would have
considerably pushed back the launch date for the HSS and could have
opened up a risk of possible Applicants and the public losing faith that it
would materialise®. Having reflected on this, Post Office hopes the
proposed HSS appeals process may assist with remedying this for any
Applicant who, unaware of the types of claims they could make, did not
claim for all heads of loss to which they were entitled or feel that they have
an unfair outcome.
GOVERNANCE
140
I attend the following meetings which are intended to provide oversight,
each of which has a defined purpose and important functional role in the
governance and delivery of the HSS:
(a) I Monthly monitoring meetings with DBT to formally oversee the HSS,
discuss performance and any outstanding matters, risks and issues.
* Noting that the launch of the HSS had already been delayed from February to May 2020 due to the Covid-19 pandemic
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(b)
(d)
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DBT requests that I attend the Horizon Redress Programme Board
meetings which are run by DBT which oversees all redress schemes
across Post Office and DBT.
I chair the weekly HMC. This is the governance forum which
represents the RU, the purpose of which is to oversee the
administration and operational performance of the HSS, amongst
other schemes and matters. It also considers and approves or
provides options / recommendations to the RC, in accordance with
the Terms of Reference (POL00448026) and RU Delegated
Authority Matrix. This may include decisions relating to matters such
as case assessment principles, design, approach, and any matters
that are precedent setting. This forum provides an opportunity for
debate and challenge on decisions and recommendation brought to
the forum.
There are two sub-committees of the HMC relating to the HSS which
I chair on a weekly basis, or as required. These are the HSS Panel
Recommendations Review Committee and the DRP Decision
Committee. The purpose of the HSS Panel Recommendations
Review Committee includes reviewing and approving
recommendations put to the Panel and recommendations being
made by the Panel which meet certain exceptional criteria (see
paragraph 52 above). The meeting is attended by a representative
from HSF.
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(e) The HSS DRP Decision Committee considers and agrees the
approach in respect of certain Pre-Mediation matters and Mediation
Negotiation Limits proceeding to Mediation.
(f) Monthly, previously fortnightly, RC meeting. The RC is a sub-
committee of Board and is responsible for considering and making
decisions/approving recommendations made by the HMC in respect
of matters relating to the HSS or making recommendations to the
Board as required, in accordance with the Terms of Reference
(POL00448026) and RU Delegated Authority Matrix. An update on
key matters and decisions taken at RC is provided to Board
following the meeting.
(g) In addition, I regularly attend wider Post Office governance
committees including weekly Strategic Executive Group (“SEG”)
meetings, Post Office Board meetings, and the Post Office Risk &
Compliance Committee (“RCC”) and on occasion, the Audit, Risk
and Compliance Committee (“ARC”).
141 Government is involved in the HSS including certain decision making as
detailed in the RU Delegated Authority Matrix.
142 As Director of RU, I bear overall responsibility for delivery of the HSS, but
also have a leadership team who lead all the individual delivery and support
areas and who report into me. The wider team produces weekly
management information on the status of all aspects of the HSS and how
many Applicants are in which stage of the process so that I can oversee
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143
144
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progress and ask questions or discuss any process changes that may be
required if we are concerned about any cohort of Applicants.
In addition to internal Post Office governance, there is a DBT governance
process which needs to be undertaken as Post Office’s sole shareholder.
When DBT wish to introduce a new initiative, it is understood that if
implemented it needs to come with appropriate funding and revised
operational agreements.
As a condition of ongoing funding, Post Office is required to secure
confirmation from DBT that it is supportive of anything new or outside of
the terms of the Operational Agreements Post Office has signed with the
department. If Post Office wish to introduce changes or update processes,
DBT’s governance sign-off has to be obtained which will include funding
and changes to formal supporting documentation between DBT and Post
Office, given its unique financial model and reliance on Government
funding.
FUTURE DEVELOPMENTS UNDER CONSIDERATION
144.1 In respect of further changes to be made to the HSS, following the HCAB
recommendation, Post Office would welcome the introduction of an
independent DBT operated HSS appeals mechanism, to be carried out by
an independent third party. Post Office has suggested to DBT that the
appeals mechanism should be set up to address particular issues that have
been identified collectively by Post Office, the Inquiry and HCAB. Any
appeals process should look to resolve the following points:
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(a) _ the lack of paid for legal advice during the pre-offer stage of the
HSs;
(b) that consequential loss guidance (UKGI00033420) was not
available until four months after the HSS opened; and
(c) that there is no investigation or merits-based assessment of losses
for those deemed below the assessment threshold, which may have
led to those Applicants accepting offers when they could have
brought forward further losses.
145 In addition to those issues, Post Office has also proposed that any
Applicants who progressed their claim without the benefit of legal advice,
and who may have missed claims or heads of loss or did not provide
relevant information, should be eligible to make an appeal in the appeals
mechanism. Post Office hopes that an independent appeals process would
remedy the issues outlined in Sir Wyn’s Interim Report.
146 AHSS appeals mechanism was first raised by HCAB in their meeting of 29
November 2023, the HCAB having previously discussed proposals for
ensuring the fairness of settlements. Since that date, Post Office and DBT
have both been considering the scope of the appeals mechanism.
147 Post Office first proposed a potential appeals mechanism and design of the
process to DBT in early December 2023. Following further discussion with
Post Office, DBT submitted the appeals mechanism proposal to the
Permanent Secretary and then the Minister who both, pre-May 2024,
provided their approval.
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148
149
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Given that a new Minister is now in place following the General Election,
the proposals will now need further consideration within Government, but
we understand that DBT remains supportive of an appeals process and
has sought ministerial guidance in relation to it.
DBT continue to await approval from Treasury of the appeals mechanism.
If the appeals mechanism is approved, Post Office would be pleased to
continue further work alongside DBT on the design and scope of it.
Consequently, Post Office wholeheartedly supports an independent appeal
process provided by and supported by Government.
DATA THEMES AND TRENDS
150
The table below sets out the average number of days it takes for
applications to complete the HSS process®. At each stage of the process
there have been improvements in the time taken at each stage of the
process across each cohort.
© These figures are based on cases that passed eligibility confirmation after 18 March 2021 when funding was agreed
with Government.
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HSS Process Stage®
Application received to
Eligibility confirmed
Eligibility confirmed to
start Case Assessment
Start Case Assessment
to Offer Issuance
...0f which: Time with
Panel
Accept to Settlement
From 18-03-21
2024 only
A
From 18-03-21
2024 only
A
From 18-03-21
2024 only
A
From 18-03-21
2024 only
A
From 18-03-21
2024 only
A
Average days’, by Case
Complexity
Stand Com
Overall BAT ard plex
162 77 157 170
72 51 70 74
90 26 87 96
78 22 82 75
43 - 45 42
35 2 37 33
196 95 158 260
191 - 112 225
5 - 46 35
7 - 7 7
7 - 7 7
0 - 0 0
35 20 28 50
33 36 30 35
7 Average days above are measurements between process milestones, and as such include both the time a case is
waiting to be actioned and worked time. We are continually working to reduce worked time through efficiencies.
However, ‘waiting to be actioned time’ can be impacted by volumes. In anticipation of significantly increased
volumes in response to the forthcoming write-out, we are planning by targeting resource levels and resource
fungibility
When analysing the data it was observed that claims often took ‘irregular’ routes through the process. Sometimes this
involved circular routes e.g. multiple RFs, or stages being bypassed e.g. many case assessments not needing an
RFI. When calculating averaged elapsed time of a process micro-stage we only considered claims that had both a
start and end date present in the data. Therefore, whilst the micro-stages are accurately calculated aggregating
them will not align to the average end-to-end.
* Fields populated with “. represent measures with insufficient data to provide a statistically meaningful metric.
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151 The following sections of the statement analyse each of these HSS process
stages in more detail. Unless stated otherwise, all data provided is, as
agreed with the Inquiry as at 31 May 2024.
Applications received
152 By 31 May 2024, Post Office had received 4,323 applications, and on
average continues to receive circa 30 applications a week. Post Office
anticipates there may be a further spike in applications when we write out
to all Postmasters advising of the Fixed Sum Offer and the closure of the
HSss.
The 4323 Applications received to 31 May 2024, by Date
1800
1600
1400
1200
1000
800
600
400
200 i
0 xz —_ fs. —- — =
Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Atri Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 atr2
2020 2021 2022 2023 2024
153 The applications received can be broadly categorised into three distinct
timeframes:
(a) Applications received during the initial period the HSS was open
(May to 14 August 2020):
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(b) Later Applications that continue to be received from 15 August
2020'°; and
(c) Applications received following the airing of the Bates ITV drama
(January 2024).
154 The table below shows the applications categorised by their case
complexity’. The three complexity categorisations are set out at paragraph
58 above.
Type of Initial Later Applications Total
application Applications Applications following the
(May — Aug (Sep 2020- Bates Drama
2020) Dec 2023) (Jan-May
2024)
Standard 1,858 220 638 2,716
..of which BAT 570 25 5) 600
Complex 690 210 707 1,607
Total 2,548 430 1,345 4,323
Types of Application received.
155 There has been an increase in the proportion of Complex Claims - 27% of
initial applications were Complex Claims (690 of 2,548); whereas 53% of
2024 applications were Complex Claims (707 of 1,345). In the same time
*° Although the scheme closed in August 2020 a few applications were allowed into the scheme after this date where
Applicants had exceptional circumstances.
*' BAT, Standard or Complex
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period, there has been an increase in Applicants being legally represented
at the outset (initial applications were 32 of 2,548 (1%); 2024 applications
were 312 of 1,345 (23%)).
156 To 31 May 2024, the HSS has received 762 (17.6%) applications that were
originally assessed as BAT. By their definition these claims are simpler and
are assessed solely on the claim information provided by the applicant in
their application form and are not required to pass through case
assessment. Even where a claim is initially flagged as BAT, the Applicant
can request that their claim be assessed by the panel; 162 (21%) of claims
originally flagged as BAT were later requested to be assessed by panel,
leaving a final population of 600 cases that have been treated as BAT
through to outcome.
157 Through the life of the HSS, we have seen a significant fall in the proportion
of BAT applications. Between May 2020 and 14 August 2020, Post Office
received 659 applications which were originally classified as BAT claims,
an average of around 190 per month. Following the publication of the
consequential loss guidance (UKGI00033420) on 1 October 2020, the
number of BAT applications dropped significantly to around an average of
4.9 per month between 15 August 2020 and May 2021. Following the
decision to allow Later Applications into the HSS in Autumn 2022 post office
continued to receive BAT applications, albeit at a far lower rate at an
average of 1.5 per month.
158 Of the 4,323 applications, 3,427 have completed Eligibility Assessment
(see paragraphs 63 to 66 above).
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159
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
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When compared to previous years, 2023-2024 has seen an increase in the
number of applications being deemed ineligible, whilst the HSS terms have
been unchanged. This has risen from 144 (5.3%) of claims in 2020-2022
to 154 (12.3%) of claims in 2023-2024. The data itself does not provide a
clear explanation for this trend, however it is worth noting that the 2020
mailing was targeted in nature and intentionally excluded Postmasters
known to fall outside the eligibility criteria (POL00448027).
Eligibility Outcomes
mmm Eligible - Cases sama Ineligible - Cases
—o— Eligible - Volume of Cases —o— Ineligible - Volume of Cases
NotRep Rep NotRep NotRep Rep ~—sNotRep ~—s Rep-_—SsNotRep ~—s Rep
2020 2021 2022 2023 2024
Eligibility Assessment Time
160
In 2020, the average Eligibility Assessment time was 162 days given the
case volumes and applicant complexity (including for example insolvency
and dissolved companies where eligibility criteria had not yet been agreed).
This reduced in 2021 and 2022, settling to an average of 66 days across
2023 and 2024. The data shows that historically, for most periods, complex
applicants and applicants who are legally represented take longer to
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2500
2000
1500
Volume
1000
i 250
Claim
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process. However, the difference in eligibility processing times have
converged; in 2023-2024 claims take a consistent time to assess (of
average 66 days). Despite the influx of claims in 2024, the RU team
deployed their resource to ensure the processing times did not spike.
Days from Application to Eligibility confirmed, split by Legally Represented and
Complainant Complexity
] = Not Represented = Represented
1. 2.Complex 1 2.Complex 1. 2.Complex 1 2.Complex 1 2. Complex
Standard Claimant Standard Claimant Standard Claimant Standard Claimant Standard Claimant
Individual Individual Individual Individual Individual
Claimant Claimant Claimant Claimant Claimant
2020 2021 2022 2023 2024
Breakdown
Of the 3,427 applications that had completed Eligibility assessment on 31
161
May 2024, there are 3,194 (93%) confirmed as Eligible and passed to the
next stage of the process. The graph below shows the number of cases
claiming each head of loss. All heads of loss have been claimed by both
legally represented and non-legally represented Applicants.
162 On average each applicant claimed 3.9 heads of loss, and this has
increased over time to 5.1 in 2024 as Postmasters and their legal
representatives have become more familiar with the HSS and the heads of
loss, and there is greater understanding of the assessment process.
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Applicants who are legally represented from inception of their claim
generally claim more heads of loss:
Average number of Heads of Loss per Claim
sms Not Legal Rep - Average of HoL count 3000
° mmm Legally Rep - Average of HoL count
8 —o— Not Legal Rep - Claim volume
2500
7
6 2000
5
1500
4
3 1000
2
500
a
ty) 0
2020 2021 2022 2023 2024
163 Whilst early applications were dominated by standard complexity claims
including BAT claims, more recently there is a higher proportion of Complex
Claims; which now equals the volume of Standard Claims:
1200 Claims by Case Complexity
= Complex Case
#000 = Standard Case
g
s 800
i
§ 600
2
8
5 400
<
200 I
° I I - — al om -. . oe i
Qt2 At Qt4 Qtr Qt2 Qt3 Qr4 Qtr Qtr2 ts Qtr4 Att Qt2 QWs td att at2
2020 2021 2022 2023 2024
Sums claimed
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164 Excluding claims of more than £1,000,000, the average shortfall loss claim
was £16,000, and the average consequential loss claim was £32,000,
totalling £48,000. Shortfall loss claims have remained consistent over time,
whereas consequential loss claims have shown considerable variation.
Further, in most periods we see that representation from inception is linked
to larger claim values; fully or partly quantified claims that had a legal
representative from inception have an average claim value of £277,000
whereas those that do not have a legal representative at inception claim
on average £119,000.
Average Claim Value: by Shortfall Loss and Consequential Loss
~£1,400k 1600
sme Average of Shortfall loss claim sam Average of CL aim
~£1,200k wereg ig 4400
Claim Volumes
1200
~£1,000k
8 1000
3
F-£800k
800
Average Claim,
B
5
600
~£400k
400
~£200k a
~£0k
Qr2 aus Qld art = Qtr2 aw3at4 att au2 avs ats tt t2 aS trd tt at
2020 2021 2022 2023 2024
Fixed Sum Offer payment
165 Data for Fixed Sum Offer applications and settlements is not included
within the data sets because, on 31 May 2024, this initiative had not yet
launched. The HSS currently has circa 500 eligible applications which were
already in the HSS process but did not yet have offers. Following
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discussion with DBT, these cases have effectively been held, awaiting final
details of the Fixed Sum Offer from DBT so that Applicants have the
opportunity to consider the Fixed Sum Offer. Note that 1,903 of 2,242 (85%)
of settled claims to date have been for less than £75,000. Once the full
details of the Fixed Sum Offer have been signed off and agreed with
Government, communications will go to all Applicants whose cases are
held. We set out the detail of the Fixed Sum Offer and the implementation
of this as both a Top-Up Payment and Fixed Sum Offer at paragraphs 15
to 17 above.
Interim Payment
166
167
168
Applicants can receive interim payments both before and after their offer is
issued to them from Post Office. Pre-offer Interim Payment amounts are
determined by the shortfall amount claimed.
In total, 474 interim payments have been paid to 312 Applicants (7% of
applicants). Of these Post Office have offered 174 single payments
equating to 100% of their offer, with the balance being partial payments;
and 23% of complex applicants received an interim payment compared to
10% for standard applicants.
The data shows that with regards to Interim Payments there are differences
between those who are legally represented than those who are not. Those
with legal representation are more likely to make a claim for Interim
Payment, especially in the earlier stages of the process. Overall, 4% of
those without legal representation have received an Interim Payment and
64% of those with legal representation have had an Interim Payment.
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Interim Payment Processing time
169 Over time, Post Office have worked to increase the speed with which it
makes Interim Payments. From request to payment was circa nine weeks
in 2022, but by 2024 it had reduced to five to six weeks. With the newly
introduced payment processes and 100% Interim Payments (explained in
paragraph 24) this should reduce to less than 10 days.
Average days from Interim Payment Request to Payment
sma Not Legally Rep - Average of IP Request to Payment
mmm Legal Rep - Average of IP Request to Payment
S
fo)
x
3
—o— Not Legally Rep - Volume
"2 —o—Legal Rep - Volume 60
§ 100 50
a
80 402
i 5
3 60 30$
5
2
2 40 20
ia
2 20 10
0 0
tra tra Qtr tre ars tra Qtr Qtr
2022 2023 2024
Shortfall Analysis
170 Following eligibility assessment, the Claim Review Team within Post Office
will conduct a SFA. This SFA is a lengthy process which seeks to validate
that shortfall losses have occurred in the relevant period by reviewing
multiple data sources across many years; this can take a few days to a
week to consider and collate into a report. The resulting document, which
contains only information and no recommendation, is passed to HSF to
complete the Legal Case Analysis. The SFA process has an all-time
average elapsed time of 278 days however, as the following chart shows,
there was a step change in performance from Q3-2022 (405 days) to Q1-
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2023 (51 days). Across 2023 and 2024 the average elapsed time further
improved to 40 days.
Average days for SFA
450 450
400 mmm Average —o— Volume 400
350 + 350
$300 + 300
9 250 250 £
3 200 200 3
3s >
& 150 150
100 100
50 » 50
i i I a ml,
Qtr Qt2 ts Qtr Atri 42 ts Qtr4 Att Qt42 Qr3 ard att ar2
2021 2022 2023 2024
Legal Case Assessment
171. Once the SFA is complete, the application proceeds to a legal case
assessment. This part of the process can be broken down into three
stages: Firstly, is the initial case assessor work that may give rise to a RFI,
secondly the RFI period where the applicant is gathering and returning
extra documentation; and lastly the case assessor, based on a full suite of
information, completes the case assessment and passes to the Panel.
172 Legal case assessment is removed with the introduction of the Fixed Sum
Offer for any Applicant that chooses the Fixed Sum Offer. Analysis for each
of these sub-processes is included below. Overall, the time from starting
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legal case assessment to Offer issuance has lengthened (Averages: 2021:
134 days; 2024: 191 days)'?.
Average days from starting Legal Case Analysis to offer issuance
mms Average time ~—-o=—Case volume
400 400
350 I 350
300 I 300
250 I 250
200
150 I 150
100 I 100
I 50
oO )
Qt2 Q43 Qtr4 Qtr Qtr2 = Qtr3trd I Qtrt «= Qtr2Qtr3 td rt tr
2021 2022 2023 2024
Calendar Days
x
8
Case volume
3
a
8
Substage 1: Initial case assessment, pre RFI.
173 The following chart highlights an improving trend: cross 2021-2022 pre-RFI
case assessment work averaged 116 days but settled in 2023-24 to 58
days.
2 As legal case assessment to Panel analytics are impacted by incomplete Panel dates data, the following chart looks
from legal case assessment to Offer as a proxy data point.
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Average days from starting Legal Case Assessment to RFI request
250 mmm Average time taken Volume of cases 140
120
200
100
8
80
Calendar Days
60
8
8
Volume of cases
40
50
Qtr Qtr2 Qtr Ard © AtrL © Atr2 = QtS Qtr Qtr «Qtr ALA Qtr at
2021 2022 2023 2024
Substage 2: Requests for Further Information
174 If more information is required a RFI is issued to the Applicant with the aim
of improving the evidential basis of a claim and, ultimately, the size of the
potential redress. See paragraph 73 above for more info. RFls have been
sent in around 99% of Complex Claims and 75% of Standard Claims, since
the HSS commenced.
175 Many claims need multiple RFls, and the average number of RFs per case
has been increasing. Applicants are asked to reply to a RFI within 28 days.
Applicants have on average been responding in 32 days to a first RFI, and
36 days if a second RFI is made. The time taken for Post Office to turn
around the first RFI response and issue a second RF is an all-time average
of 78 days, which is on an increasing trend.
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Average number of RFls per Case
mmm Average of RFI Count
1.80 ____ count of RFI Count 400.
1.60 — — Linear (Average of RFI Count) pon
= 140 300
3s
& 1.20
2 250 £
2 1.00 3
z 200 $
& 0.80 Fy
° 8
a 150 oO
2
§ 060
< 0.40 100
0.20 50
0.00 0
Qtr2 Qtr3 Qtra Qtr1 Qtr2 Qtr3 Qtra Qtr1 Qtr2 Qtr3 Qtra tri Qtr2
2021 2022 2023 2024
176 The increased number of RF Is per claim has contributed to an increase in
the overall time a case will spend in the RFI cycle:
Average number of days from starting RFI to final RFI response
mmm Average time Case volume — — -Linear (Average time)
140 350
120 > 300
100 + 250
2
$ 2
8 80 + 200 §
5 $
5 60 I 150 8
fy °
40 > 100
20 I 50
0 L
Qtri =Qtr2 Qtr3 Qtr4 Qtri Qtr2 Qtr3 Qtr4 Qtr Qtr2 Qtr3 Qtr4 Qtri Qtr2
2021 2022 2023 2024
Substage 3: Case assessor work to complete the case and hand it to Panel
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177 The following chart discloses the average time taken from the final RFI
response from the Applicant, when all information should be to hand, to the
passing of the case file to the Panel:
Average number of days from last RFI Applicant response,
to sent to Panel
mms Average time
Case volume
350
~
3
s
300
2
8
8
+ 250
2
3
38
200
Ss
S
s
8
Case volume
Calendar Days
x
8
8
8
3
8
a
8
Qtr3 tra Qtrt Qtr2 Qtr3. Qtr4 Qtr1 tra Qtr3. tra
2021 2022 2023
°
°
Independent Panel Assessment
178 In 2021, there were 40 Panel meetings, which made a total of 868
recommendations for redress; in 2022 there were 141 meetings which
made a total of 1,408 recommendations; in 2023 there were 82 meetings
with 471 recommendations made; and so far in 2024 there have been 38
meetings with 149 recommendations made. The high recommendations
per Panel ratio evident early in the process results from the Panel noting
their agreement to the proposed BAT offers, and in recent times falls in line
with heads of loss per claim.
179 Offers Issued to the end of May 2024, there have been 2,720 Offers issued.
The time needed to issue an Offer reflects several factors. For example,
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the Q1-2021 peak reflects the 416 BAT claims that were issued as soon as
funding was agreed and the 2022 peak reflects Post Office working through
original applications once case assessment principles were agreed.
Offers Issued
500
450
400
© 350
5 300
2 250
© 200
5 150
400 I I
0 ] I U ie
Qtri Qtr2 Qtr3 Qtr4 Qtri Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2
2021 2022 2023 2024
a
S
Time to issue an Offer
180 The average from Panel recommendation to an offer being sent is 37 days
(see paragraph 88 above for more detail on this).
Offer Value
181 The average’? offer value is £53,000, however actual offer values vary
significantly. In almost all instances a legally represented Applicant
receives a higher offer even within the same Applicant types (i.e. Complex
or Standard). In particular, there is a notable increase in the amount offered
to legally represented Complex Applicants'* which is not mirrored in the
8 This average is for all Heads of Loss claims so excludes Compensatory Interest.
“A complex Applicant is an Applicant with any of the following attributes: deceased, company, partnership, dissolved,
‘Insolvency Case’ flag. Being a complex Applicant goes to the Applicant's eligibility for the HSS.
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non-legally represented Applicants. For example, of the 773 Complex
Claims with offers, the 554 cases that were never legally represented had
an average offer value of £107,000, whereas the 219 who were legally
represented at some point averaged an offer of £195,000. Of these legally
represented claims:
(a) Applicants represented from the beginning (31 cases) averaged an
offer value of £269,000.
(b) Applicants receiving legal representation later in the process (188
cases) averaged an offer of £183,000. At the point of Offer all
Applicants can seek reasonable legal costs to be reimbursed by
Post Office for legal advice.
Average offer value, By Case Complexity and Legal Representation
mmm Not Legally Rep - Average of Total Offer sm Legally Represented - Average of Total Offer
——Not Legally Rep - Count of Total Offer Legally Represented - Count of Total Offer
£250,000 4000
900
£200,000 800
700
$ £150,000 600 4
S —
$ 500 5
s 3
5 £100,000 400 7
300
£50,000 200
100
£0
Complex Standard Complex Standard Complex Standard Complex Standard
Case Case Case Case Case Case Case Case
2021 2022 2023 2024
Applicant's response to an offer
182 On average, Applicants accept an offer within 40 days. However, where an
Applicant is legally represented, this increases to 185 days. Complex
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Applicants’ offers take longer to accept with an average of 58 days to
accept. Where the offer made is to a Complex Applicant and relates to a
complex claim, the average is 72 days to accept. However, across all
categories Applicants are responding more quickly, as demonstrated in the
following charts:
Average days from Offer Sent to Accept
573 =Not Legally Rep = Legally Represented
194
135
— I el = —
2021 2022 2023 2024
Average days from Offer Sent to Accept
195 Standard Case = Complex Case
62
43 43
. al I aa
II II =
2021 2022 2023 2024
Average days from Offer Sent to Accept
1. Standard Individual Claimant = 2. Complex Claimant
61 65
57
46
27 26
a [ . .
2021 2022 2023 2024
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183 An Applicant may respond to an offer by either accepting, querying or
disputing the offer. There is a trend that an increasing proportion of offers
are being disputed (2022 - 22%; 2023 - 37%). For 2024, the proportion in
dispute is at 32% but there are still over twenty offers without response.
Offers Issued, split by whether the Applicant subsequently disputed
= Not Disputed = Disputed
100%
90%
80%
7
60%
50%
40%
3
20%
10%
0%
Qtr = Qtr2 Qtr Qtr4 rt Qt2 Std I tt tr2 tS tra tt tr
2021 2022 2023 2024
3
ze
8
&
Legal costs take-up
184 As, an Applicant can recover reasonable legal expenses from Post Office:
a. The number of Applicants who have instructed legal representation
is 316 (12%) out of 2,720 offers. In addition, there have been 120
payments for legal support to non-legally represented Applicants"®,
meaning a total of 436 (16%) out of 2,720 Applicants in receipt of
offers have received legal advice.
'SThese are claims from individuals that have not engaged with Post Office via a legal representative and therefore were
understood to be non-legal represented Applicants. If they then presented Post Office with a legal invoice, generally
after accepting their offer, Post Office have reimbursed them.
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b. The data shows a lower take-up of legal advice in 2021. At that point
most offers were below the assessment threshold and, given the
claim sum requested was paid out, it was not expected that
Applicants would feel the need to seek legal advice.
c. Complex Applicants are more likely to request a payment for legal
advice fees: 28% of Complex Applicants requested legal advice
payments compared to 11% of standard Applicants.
d. Once Post Office moved onto tackling more assessed claims in
2022 and 2023, there was an increase in payments made for legal
advice:
Offers where we paid for Applicant's legal advice
40
30
20 I
10
ae i I
Qtrl Qtr2 §Qtr3. tra «trl «= Qtr2 Atr3 I Qtr4 I trl Atr2Qtr3 I Qtrd = Qtrt
Volume of Offers Sent
Ly
2021 2022 2023 2024
Dispute Resolution Procedure
185 Of the 2,720 offers made, 532 have been disputed:
(a) 86% of legally represented Applicants dispute their offer compared
to only 11% of non-represented Applicants.
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(b) Legally represented Applicants take longer to notify Post Office of
their dispute (97 days vs. 73 for not legally represented).
(c) I The average acceptance time is 261 days from date of dispute"®.
(d) I There remain 383 unresolved disputes with an average time in
dispute of 14 months, of which 261 have not yet gone through a
Good Faith Meeting. Some feedback from legal representatives is
to by-pass Good Faith meetings and go straight to the next
Escalation stage to speed up resolution, which is why the process
is approached with a degree of flexibility.
186 The statistics evidence a long-term trend of an increasing proportion of
disputes, however due to the time between Post Office making an offer and
an Applicant responding it is too early to confirm that this trend will continue
in 2024.
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Proportion of offers disputed, by date of first offer
50%
45%
40%
35%
30%
25%
20:
15%
[1,11
~~ o i
Qtrl = Qtr2 Qtr3 tra Qtrt «—Qtr2 Qtr. tra I Qtr1Qtr2- tS trd §Qtrt tra
2021 2022 2023 2024
z
a
x ®
Once a claim is in dispute, the average acceptance time is 261 days from date of
dispute’’.
187 To May 2024, there have been 176 Good Faith Meetings, with 53
Applicants accepting an offer following the meeting, leaving 123
unresolved. Of the 123, there are 100 that have not progressed to an
Escalation Meeting by 31 May 2024. Of these 100, at the time of writing:
(a) I Two have since accepted;
(b) 20 have since progressed to later DRP stages, of which 13 have
received an interim payment;
1” The shortest timeframe to settle a claim through DRP was two days (queries were raised about the offer and next
steps but the claim did not require reassessment) and the longest was 666 days with the case settling after two
Good Faith Meetings (GF).
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(c) 56 still in the Good Fath Meeting stage are Legally represented, of
which 42 have received an Interim Payment;
(d) 20 still in the Good Faith Meeting stage are not Legally represented,
of which eight have received an Interim Payment, and are being
actively worked; and
(e) I Two cases have been suspended to due inactivity.
188 There were 25 Escalation Meetings to May 2024, including two cases that
did not first have a Good Faith Meeting, of which seven Applicants
accepted an offer following the meeting. Post Office’s strategic position is
to resolve claims through in-person meetings with senior RU staff in
attendance, which replaced teleconference meetings from April 2024.
Cases not yet scheduled in are being actively worked to progress towards
a resolution.
189 By 31 May 2024, Post Office had completed five successful mediations
with Postmasters resulting in a mediated agreement.
190 The introduction of the Fixed Sum Offer and an Appeal process will help
resolve many of the disputes.
(a) 32 Applicants have informed DRT that they were awaiting further
information on the £75k top-up and Appeal process before
accepting their offer.
(b) I DRThas also identified 80-100 other Applicants who may accept the
fixed sum award when it is available.
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Settlement
191 All-time average from acceptance of the offer to formal settlement (at the
point the payment sent) is 29 days. The 2024 average (to 31 May) is 33
days.
192 Complex Claims take longer to settle, whether by claim or Applicant
complexity: 59 days for Complex Claims versus 22 days for Standard
Claims; and 42 days for Complex Applicants versus 27 days for standard
Applicants.
Average days from acceptance of offer to settlement, by offer date
mmm Average of Accept to Settlement time I —o—Volume
60 450
400
350
300
250
200
150
23 (0
19%
20 17
1
10
50
0) 80
100
Qtr = Qt2 tS Qtrd4 Qtr O42 O43 Qtrd Qtr Qtr2 Qtr3 Qtr4 Qtr atr2
2021 2022 2023 2024
Calendar days
8
8
Volume
193 For urgent cases a faster payment method of payment can be used, and
for the Tax TopUp Payments and Top-Up Payments a more automated
approach has been implemented where payment is made within 10 days
of the date an offer is accepted. Given the benefit this brings to Applicants,
Post Office are looking to roll this quicker payment process out across the
RU payment portfolio.
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Discontinuation of claim
Withdrawn Claims
194
Fd
Since the HSS began, eight Applicants decided, unprompted by Post
Office, not to continue with their application and have withdrawn their claim.
In response to such a communication, Post Office writes to the Applicant
to confirm that no further investigations relating to shortfalls will be carried
out. It is anticipated that the mailout to potential new Applicants to the HSS
to make the Fixed Sum Award will invite these Applicants to apply again.
Claims withdrawn, split byreason
aad
atra
Orr ars Qtr2
Paused Claims
195
Seven applications have not progressed to assessment because the
Applicant has not responded to Post Office's request for either a signed
application form, identification, or authority to act documents. Post Office
have advised the Applicants that while we cannot proceed whilst those are
outstanding, we can as soon as documents are provided. In the event Post
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Office send any future mailings Applicants with paused claims will be
included.
Summary
196
197
198
Post Office acknowledges that for the reasons set out above, the HSS was
not as efficient and effective as it should have been from the outset for
which Post Office apologises. Post Office has learned lessons, listened to
feedback from a wide range of sources and worked with Government to
make improvements where possible.
Post Office also recognises that it underestimated the level of interest such
a scheme would generate, the subsequent complications and the level of
governance and oversight required by Government especially around
funding and the understandable scrutiny required given the use of public
monies. This is enhanced by the unique Post Office shareholding
arrangement with one shareholder; the Government.
The main reason Post Office welcomes a Government led appeals process
is so that those Applicants who feel they did not receive full and fair redress
through the HSS process have the opportunity to rectify this.
GLO Scheme
199
200
Further to paragraph 7 above, the Inquiry raised queries in Nick Read’s
Rule 9 request regarding the GLO Scheme for which the RU has
accountability. As such, I address these questions here.
Post Office had no direct involvement in relation to the GLO Scheme which
it considers is entirely appropriate as it should be completely independent.
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201
202
203
204
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Post Office shared the case assessment principles with Government in
order to assist with drafting the GLO Scheme’s principles. Therefore, the
GLO Scheme's principles were based on the HSS case assessment
principles.
Post Office was involved directly in relation to the disclosure exercise to
provide the documentation required by the GLO Scheme. Initially, there
were operational teething issues in setting up the disclosure process
resulting in Post Office not meeting the required production numbers set
out by DBT. Consequently, Post Office accelerated its delivery by standing
up a team dedicated to GLO Scheme disclosure and delivered four weeks
early.
Post Office was involved in agreeing terms for the disclosure of material
with DBT to enable the assessment of claims in the GLO Scheme. I had
sight of a data sharing brief prepared by my colleague and she delivered it
to the Board. However, I owned the document and was accountable for it.
As such, my team and I were very involved in implementing a data sharing
process.
Post Office had discussions with DBT regarding the data sharing plan
structure and we agreed it with them. Post Office entered into a data
sharing agreement with DBT and were involved in the plans.
At the management meeting I hold on a weekly basis (referenced at
paragraph 142 above), Post Office met to discuss how it was progressing
against the proposed plan for disclosure. Discussions revolved around the
number of documents to be disclosed, the number of documents that had
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been disclosed and the quality of disclosure. Post Office monitored the
progress throughout the process.
205 At the outset, the disclosure process was clunky and slow to get started.
Consequently, I was also responsible for recruiting an additional team in
order to achieve the plan that had been agreed; the team reached 57
people which demonstrates the volume and breadth of the undertaking
required.
Statement of Truth
I believe the content of this statement to be true.
Dated: 4 September 2024
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Index of Exhibits to the sixth witness statement of Simon Recaldin on
behalf of Post Office Limited in response to Rule 9 Request 56
Number I Inquiry URN Document Description Control/Production
Number
1. POL00448026 I Horizon Shortfall Scheme Terms of POL-BSFF-108-
Reference 0000005
2. POL00448027 I Horizon Eligibility Criteria POL-BSFF-108-
0000006
3. UKGI00033420 I Horizon Consequential Loss UKG1I042315-001
4. POL00448026 I Panel Terms of Reference POL-BSFF-108-
0000005
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