Demands on Fujitsu to contribute to £1bn Horizon scandal compensation costs

IT supplier Fujitsu should pay the price for standing by while a “scandalous tragedy unfolded” in front of its eyes, a peer has said as members of the House of Lords rounded on the Japanese IT giant.

So far, Fujitsu has escaped financial costs for its role in the Post Office Horizon scandal, in which errors in its computer system, which it covered up, caused unexplained losses for which subpostmasters were blamed and punished, with some being jailed.

Conservative peer James Arbuthnot said there are also others to blame for what unfolded in the scandal, notably the Post Office management and government officials, but Fujitsu must take its share of the blame and pay towards the huge compensation bill.

Since it was revealed by Computer Weekly earlier this month that the government last year paid £1bn of taxpayers’ money in subsidies to the Post Office to cover compensation costs, pressure in Parliament has intensified.

During a House of Lords debate triggered by a Private Notice Question from Arbuthnot regarding compensation for subpostmaster victims of the Horizon scandal, the lack of blame apportioned to Fujitsu was highlighted.

Arbuthnot said in the debate: “Fujitsu knew that it could, and did, alter the accounts of subpostmasters without their knowledge. It knew that the government was denying that could be done. It knew that the subpostmasters were being prosecuted.”

A Computer Weekly investigation in 2009 revealed the stories of subpostmasters whose lives had been ruined as a result of being held responsible for losses that did not actually exist. Many were prosecuted and sent to prison, and they and others lost their businesses and homes to repay the Post Office (see timeline of Computer Weekly stories below).

Between 2000 and 2015, Fujitsu stood by while the Post Office prosecuted subpostmasters based on evidence from the Horizon system, which Fujitsu staff knew was flawed. Two former Fujitsu workers, who gave evidence in the trials of subpostmasters being prosecuted for financial crimes, are currently under investigation for potentially committing perjury.

Arbuthnot asked: “Is it not high time and beyond the time that Fujitsu began to be part of the solution rather than part of the problem?”

Conservative peer Martin Callanan, a UK government minister, said the government would wait until the conclusion of the statutory public inquiry into the scandal before commenting. “We all have our suspicions about this and our views, but the reason the inquiry has been set up is to provide definitive answers to questions like the very good one the noble lord has proposed,” he said.

Arbuthnot has been a long-time supporter of subpostmasters who suffered as a result of being wrongly blamed and punished for unexplained accounting shortfalls that were caused by errors in the Horizon computer system from Fujitsu, which is used in Post Office branches.

After the debate, Arbuthnot told Computer Weekly that the “eye-watering” size of the compensation bill will make the entire country, as well as both Houses of Parliament, look even harder at how to properly apportion the costs of putting things right. “But put it right we must, and we will,” he said.

“It is for lawyers to advise how, legally, the story of permitting the course of justice to be perverted – which is what has happened here – should be pursued. But Fujitsu also has a commercial relationship with this and other governments, which presumably it wants to maintain. It has a good reputation, but the Horizon scandal is steadily eroding that reputation to an extent which must worry Fujitsu’s senior management. Addressing this matter will be an essential part of its corporate responsibility.”

Labour MP Karl Turner said: “It seems that the government is still procuring Fujitsu services. This shouldn’t be unless they cough up for their part in the destruction of the lives of innocent people.”

According to figures from Tussell, Fujitsu has been awarded £3.1bn worth of contracts with the UK public sector since 2013, while subpostmasters suffered unimaginable hardship triggered by IT faults the supplier hid from them. The contracts include two with the Post Office, worth a total of £440m. Meanwhile, the suicides of four former subpostmasters have been linked to the scandal.

Turner added: “I have always argued that the government should be looking to pursue Fujitsu for monies it will have to pay in compensation to the victims of the Horizon scandal. I do not think that Fujitsu should be walking away from this.”

Alan Bates, a former subpostmaster who lost his business in 2003 after being blamed for unexplained accounting shortfalls and later set up the Justice for Subpostmasters Alliance, said it was high time that all victims were compensated.

“Regardless of where the money comes from, subpostmasters need to be recompensed for what they lost,” he said. “It is up to the government and the Post Office to negotiate with Fujitsu.”

Former subpostmaster and Horizon scandal victim Jo Hamilton was the lead claimant in a group of 39 former subpostmasters who had wrongful criminal convictions overturned in the Court of Appeal in April last year.

She said: “Fujitsu is the elephant in the room. They clearly knew what was going on and are culpable. For their role in this dreadful scandal, which has literally ruined thousands of lives, they should be made to contribute to the compensation.”

Computer Weekly asked Fujitsu if it was prepared to contribute to the bill to compensate subpostmaster victims of the Horizon scandal and whether it accepts some responsibility for what happened. It refused to comment.

Nine times out of 10, an IT supplier would be sued by its customers if system faults caused financial and reputational damage for customers, but despite its software being central to one of the biggest miscarriages of justice in UK history, Fujitsu has so far escaped such action.

Speaking to Computer Weekly in November, James Hartley, a partner at solicitors Freeths who managed a High Court group litigation in 2018/19 that saw subpostmasters sue the Post Office to prove Fujitsu’s system was faulty, said the supplier “has been very lucky”.

“Because the Post Office were themselves massively to blame, Fujitsu got away with it,” said Hartley. “It could have been very different. What would normally happen is victims would sue the Post Office and the Post Office would have sued its IT supplier, in this case Fujitsu, for developing a defective system. But this hasn’t happened.

“I believe the reason is partly because it knows that its management has caused a lot of this trouble and there is every chance that if it brought a claim against Fujitsu, the court would see this as the Post Office wrongly trying to pass the blame.”