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Post Office ‘failures’ may mean chance to claw back £1bn from Fujitsu is lost, legal experts say

Sub-postmasters and their supporters celebrating their Appeal Court victory in 2021
Sub-postmasters and their supporters celebrating their Appeal Court victory in 2021, but many are still awaiting compensation - YUI MOK/PA WIRE

The Post Office may have missed its chance to claw back money from Fujitsu to help fund compensation payouts, experts have warned.

The tech firm, which provided the faulty Horizon software and supported the wrongful prosecution of postmasters, has apologised for its actions and said it has a “moral obligation” to help compensate victims.

However, the language has been vague. Most victims have not yet seen substantive compensation and many are preparing to fight the government to achieve decent payouts.

They have also expressed scepticism that Fujitsu will make meaningful funds available, with the overall bill predicted to substantially exceed £1 billion.

Six years to launch claims

One option that could have forced Fujitsu to pay would have been for the Post Office to sue. But experts say it may now be too late to launch a legal claim because Fujitsu’s role in providing the faulty software has been known for so long.

Under the Limitation Act, claimants have a maximum of six years to launch legal action for a wide variety of claims, including those for breach of contract and tort-based claims.

Dan Neidle, from the Tax Policy Associates think tank, said: “We’ve spoken to leading commercial litigation lawyers, and we’re concerned that the Post Office’s own failures mean that there is little legal prospect of recovering the £1billion from Fujitsu in the courts.”

He added: “We have reviewed Post Office annual reports and accounts, and other publicly available documentation, and can see no mention of any potential claim against Fujitsu to recover some of its Horizon losses.

“This is surprising given the £1billion-plus cost to the Post Office of the scandal, the fact that the ultimate cause was faulty software provided by Fujitsu, and the evidence that Fujitsu personnel were complicit.”

In practice, the six-year limitation period is often taken by the courts to begin from the point when the claimant became aware of the problem, or should have been aware. Mr Neidle said that the latest this could plausibly be said to be in the Horizon case was 2013.

This was the year in which barrister Simon Clarke advised the post office there were serious problems with evidence in a criminal trial pertaining to Horizon. It was also when forensic accountancy firm Second Sight, which had been commissioned to look into complaints of faults by the Post Office, produced a report identifying serious bugs in Horizon.

Post Office says it has ‘standstill agreement’

“It is plausible, even likely, that the Post Office was aware of these issues well before 2013, but in our view 2013 is the latest date that the limitation period clock will have started ticking.

“That means the limitation period probably ended in 2019 at the latest.”

The Post Office told The Telegraph that it has a “standstill agreement” in place with Fujitsu. Standstill agreements typically stop – in legal terms – the lapse of time. But the Post Office did not say when it struck this agreement.

It was previously reported that in 2020 it instructed its lawyers, Herbert Smith Freehills, to consider a civil claim against Fujitsu but this was paused until the conclusion of the public inquiry.

If that referred to the standstill agreement, then it is likely to have been struck too late for the Limitation Act, according to Mr Neidle, giving Fujitsu room to avoid being ordered to pay out in full.

A Post Office spokesman said: “We fully share the aims of the current public inquiry, set up to get to the truth of what happened in the past and accountability.

“It’s for the inquiry to reach its own independent conclusions after consideration of all the evidence on the issues it is examining.

“This includes the role of Fujitsu in the Horizon IT scandal. Post Office can confirm that it has a standstill agreement with Fujitsu.”

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