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Fujitsu is facing mounting pressure this week to foot part of an estimated £1bn compensation bill for the victims of the Horizon IT scandal.
The Japanese IT company developed the faulty computer system at the centre of the affair, but has long distanced itself from the miscarriage of justice which involved the Post Office prosecuting more than 700 sub-postmasters between 2000 and 2014.
A High Court ruling in 2019 brought by 555 sub-postmasters found that a number of “bugs, errors and defects” had meant there was a “material risk” that Horizon was to blame for the faulty data used in the prosecutions.
A further two hundred cases are estimated to have been brought by other authorities, including in Scotland and Northern Ireland.
This week, Fujitsu’s current and former executives will be hauled in front of a UK public inquiry into the scandal and forced to give evidence to a committee of MPs. The company has faced growing calls to contribute towards the government’s compensation fund.
“Taxpayers have a right to know who exactly is going to pay the hundreds of millions in compensation now owed, said Liam Byrne, Labour MP and chair of the House of Commons’ business and trade committee. He said this included Fujitsu given the role their system played in “destroying innocent lives”.
Byrne has called for the government to issue a moratorium on public sector contracts for Fujitsu as it awaits the findings of the inquiry which are expected this summer.
Why did Fujitsu develop the Horizon system?
It was developed by Fujitsu’s UK arm, International Computers Limited (ICL), in the late 1990s as part of a government project to clamp down on social security fraud committed via the Post Office’s paper-based payments process.
Fujitsu had acquired ICL in phases. It initially took an 80 per cent stake in 1990, before buying the remaining shares in 1998. ICL was rebranded Fujitsu three years later in 2002.
After the project was beset with technical issues, the UK’s benefits agency pulled out at a cost of £720mn to the taxpayer and the project was scrapped. But the Horizon system would be resurrected in 1999 as a sales terminal used in some 17,000 Post Office branches.
What went wrong?
Soon after the Horizon system was rolled out, many sub-postmasters — individuals contracted to run local Post Office branches — complained their accounts were not balancing.
They frequently reported shortfalls and on-occasion surpluses. Connectivity issues compounded the difficulties, while glitches altered accounting records and created duplicate transactions.
Under the terms of their contract with the Post Office, sub-postmasters were responsible for covering any accounting losses. More than 4,000 individuals were pursued for shortfalls while many were prosecuted. The Post Office blocked request for disclosure of “known error logs” held by Fujitsu that documented issues with Horizon.
Stephen Mason, a barrister and joint-editor of Electronic Evidence, said claims that these logs would cost tens of thousands of pounds to disclose suggested the system was of poor quality and design.
He added that without access to this data sub-postmasters were unable to produce a robust defence in court, particularly as legislation from the late 1990s set a high bar that treated computer evidence as infallible unless proven otherwise.
What role did ‘expert witnesses’ play?
Post Office lawyers relied on Fujitsu engineers as witnesses in the sub-postmasters’ trials. They told judges and juries that Horizon was robust and that individual cases were isolated examples, while denying Fujitsu had remote access to terminals — which was later proved to be untrue.
It later emerged at the inquiry that Fujitsu had “unrestricted and unauditable” access to branch accounts, while the testimony historically provided by Fujitsu employees has become subject to further scrutiny.
Jason Beer KC, lead counsel to the inquiry, in December challenged a lawyer who had acted for the Post Office over why its “witnesses of fact” — those tasked with objectively verifying material — were understood by judges to be expert witnesses. This meant they were viewed as impartial, despite being entangled in the affair.
The Metropolitan Police has interviewed two Fujitsu employees, disclosed to the inquiry as Anne Chambers and Gareth Jenkins, under caution in relation to allegations of perjury and perverting the course of justice following evidence they provided as expert witnesses in Post Office prosecutions. The Met said no individual had been arrested in relation to the matter.
What was the culture at Fujitsu?
Fujitsu’s Horizon call helpline was the first port of call for sub-postmasters in need of assistance with their faulty systems. But their concerns were frequently shrugged off and the public inquiry has heard how the culture within these centres exacerbated the issue.
In March 2022, the inquiry took evidence from a former Fujitsu employee who alleged company staff on a Horizon helpline displayed discriminatory behaviour.
“Shouts across the floor could be heard saying: ‘I have another Patel scamming again’. They mistrusted every Asian postmaster . . . They created a picture of postmasters that suggested they were incompetent or fraudsters,” Amandeep Singh told the inquiry.
Singh added that staff at Fujitsu’s call centres were ill-equipped to deal with the sub-postmasters’ concerns, particularly as they were offered little training and were frequently overwhelmed with calls midweek when sub-postmasters were due to balance their books.
Fujitsu UK said the public inquiry was examining complex events stretching back more than two decades and it “apologised for its role in [the postmasters’] suffering”.
It added: “Out of respect for the inquiry process, it would be inappropriate for Fujitsu to comment further at this time”.