Fujitsu admits for first time it should help compensate Post Office victims

The technology company Fujitsu has admitted for the first time that it should pay financial redress to victims of the Post Office scandal, as MPs were told by former post office operator Alan Bates that people were “dying” while waiting for their claims to be processed.

In evidence to MPs on the business select committee, Fujitsu’s European boss, Paul Patterson, admitted the company had known the IT system was faulty since the 1990s.

Fujitsu has earned £2.4bn from the contract, which will have run for more than a quarter of a century by the time it concludes. The bill for compensation, which will be paid by the government and the taxpayer-owned Post Office, is now expected to exceed £1bn.

Asked if the Japanese-owned company should contribute, Patterson agreed it should.

But he said the exact amount to be contributed by Fujitsu would be determined only after the inquiry, led by a judge, Sir Wyn Williams.

Related: ‘How much is Fujitsu going to pay?’ Questions for Post Office IT firm as it faces MPs

“I think there is a moral obligation for the company to contribute,” Patterson said. “The right place to determine that is when our responsibility is very clear. There are many parties involved in this travesty.”

He admitted that Fujitsu knew the Horizon system was flawed at the time that the firm was supporting the Post Office in prosecuting more than 700 post office operators.

“Fujitsu would like to apologise for our part in this appalling miscarriage of justice. We were involved from the very start. We did have bugs and errors from the start and we did help the Post Office with prosecutions of subpostmasters.”

The committee chair, Liam Byrne, told the Guardian that Fujitsu’s admission was a “step forward” and called for clarity from the government on how much redress ministers would demand from the Post Office and Fujitsu and how quickly it would be delivered. The government said in 2021 it would step in to fund compensation if the Post Office was unable to meet the cost.

MPs heard from two former post office operators, Josephine Hamilton and Alan Bates, the man at the centre of a recent ITV drama credited with spurring political action, including a promise by the government to take the highly unusual step of legislating to overturn convictions en masse.

Both said that claims for redress were being held up by red tape and a lack of resources provided by the government to process claims in some of the three separate compensation schemes, adding to the suffering of those who had been wrongly prosecuted or convicted.

“It is frustrating to put it mildly,” Bates said. “I mean, there is no reason at all why full financial redress shouldn’t have been delivered by now. It’s gone on for far too long. People are suffering, they’re dying … And it just seems to be tied up in bureaucracy.”

According to Neil Hudgell, a solicitor representing former post office operators claiming redress, just three of 73 claimants he represents have received full payment.

Hamilton described the compensation system as like a “factory of bureaucracy that just swallows up paperwork”.

“I know a lot of the group and they are literally falling apart waiting for the end of this.”

Bates referred to a 91-year-old former post office operator who was still waiting for a payout. “How many more years has she got to wait for financial redress? It’s very unfair and it’s cruel.”

Hamilton said it was “almost like being retried” and went on to describe the experience of being accused of crimes by the Post Office. “They convinced me that it was all my fault. I wasn’t tech savvy … I thought I’d made a hash of it. They’d gaslit me for about three years.”

Hudgell said senior staff at the Post Office must have been convinced that Horizon would “catch out a nation of dishonest people”.

Speaking after the evidence session, Byrne told the Guardian: “Today’s admission from Fujitsu of a moral obligation to pay is an important step forward. It was their malfunctioning computer system that helped trigger a miscarriage of justice.

“Now we need to know exactly how much ministers are demanding and, crucially, when – after years of red tape – they will finally deliver full redress for the victims.”

Business minister Kevin Hollinrake had earlier admitted that the government had made “mistakes” in failing to challenge the Post Office.

“Clearly we could have done better,” he said.

He also told the committee that compensation costs could exceed current estimates of £1bn.

Lord Arbuthnot, the peer who has long campaigned on behalf of Horizon victims, said the Post Office’s actions went unquestioned for so long because it involved “people who have been convicted of crime, up against the most trusted brand in the country”.

“But it was actually most trusted because of the relationships that subpostmasters had with communities.”

Nick Read, the chief executive of the Post Office, said the organisation had been in a “culture of denial” when he joined in 2019.

He said the company, which is private but state-owned, was committed to “get off Horizon”, which still runs Post Office systems and is scheduled to do so until 2025 after contract extensions.