Fujitsu Says It Will Pay Compensation in Post Office Scandal

An executive at Fujitsu Ltd., whose software contributed to improper convictions of UK Post Office sub-postmasters, said the company has a “moral responsibility” to help provide redress for those who suffered as a result.

“I am personally appalled by the evidence we have seen,” Paul Patterson, Europe director at Fujitsu Services Limited, told the House of Commons Business and Trade Committee on Tuesday. “I think there is a moral obligation for the company to contribute.”

Patterson’s concession suggests that it won’t just be the UK taxpayer who pays out compensation to hundreds of sub-postmasters who were wrongfully prosecuted for theft and false accounting by the government-owned Post Office between 1999 and 2015 after computer glitches led to shortfalls in their accounts.

Shares in Fujitsu, whose UK business makes up about 5% of its sales, fell as much as 1.8% in Tokyo Wednesday morning, adding to two straight days of stock price declines. Fujitsu earned 65% of its overall revenue in its home market as of end-September, with Europe accounting for less than 18%, according to data compiled by Bloomberg.

“Maximum negative impact on sales will be, at most, 3-4% in sales, even if we assume penalties, contract suspension and compensation,” said Macquarie Capital analyst Hiroshi Yamashina in a note to investors. “But uncertain negative financial impact could make investors risk-averse.”

Prime Minister Rishi Sunak last week announced a law to quash the convictions and speed up compensation to some 980 UK Post Office workers as he sought to draw a line under the long-running saga. Redress was also offered to thousands more who were caught up in the scandal but weren’t prosecuted after using their own money to close the shortfalls and avoid charges.

Government minister Kevin Hollinrake later told the same panel on Tuesday that there is a “significant chance” the government’s move to cancel convictions means some people who were actually guilty may get compensation.

Patterson was giving evidence alongside Post Office Chief Executive Officer Nick Read, who told the same hearing that total compensation “may well be” in the order of £1 billion ($1.3 billion).

“We’re all very keen to get to the bottom of this,” said Read, who has held the role for four years. “I’ve been very clear since I joined the organization, that the Post Office simply can’t move forward until such time as proper redress has been determined and more importantly has been paid out.”

Patterson — appointed to his current role in 2019 — said responsibility for the scandal “lies in many places,” including Fujitsu, and that the the company would take advice from an inquiry into the matter when deciding on its contribution to the redress. He said he had no current estimate for Fujitsu’s liability.

He added that his “gut feeling” was that people within Fujitsu knew about the problems with its Horizon software, conceding that it contained bugs which could have had an impact on the accounts logged by sub-postmasters. While Patterson could not give a date when Fujitsu staff first notified the Post Office of problems with Horizon, he said there were “known bugs and errors in the system from a very early stage.”

He added that when the Post Office was notified, how they “chose to use that information in their prosecutions was entirely on their side.”

While Patterson said Fujitsu was now “an ethical company” and was “quite different to the company in the early 2000s,” Read vowed that the Post Office would “be getting off Horizon” software it still uses a quarter of a century after its introduction.

Earlier on Tuesday MPs on the committee heard evidence from former sub-postmasters including Alan Bates, founder of the Justice for Sub-postmasters Alliance on whom a recent ITV dramatization of the Horizon affair was based, and Jo Hamilton, a former sub-postmistress caught up in the scandal.

Both spoke of their frustration that the redress process for victims of the Horizon scandal was taking so long. “There obviously isn’t enough of a resource being put in at that end,” Bates said.

Hamilton spoke about how she had been forced to plow seemingly endless amounts of money into the Post Office that she ran, as she was accused of mis-accounting that was actually the fault of the Horizon software. “I wasn’t tech savvy at all back 20 years ago — they convinced me it was my fault,” she said, adding that the Post Office had “gaslit” her.

Post Office Horizon Scandal Parliamentary Select Committee Hearing

Jo Hamilton arrives for a parliamentary select committee hearing into the Post Office Horizon scandal in London, on Jan. 16.

“When you take on a sub-Post Office, you actually invest a large amount of money in that business. And as happened in my case, when they fell out with me, they walked off with that amount of money,” Hamilton said. “I think a lot of people feel there’s a financial gun held to their head if they start kicking off or start raising too many problems with the Post Office.”

Neil Hudgell, Executive Chairman of Hudgell Solicitors who has represented some of the postmasters, earlier told the committee that spouses, children and parents of postmasters caught up in the scandal had themselves suffered stresses leading to behavioral disorders, miscarriages and shattered family lives.

“There’s a whole raft and category of people that are not compensable and that’s another strand of this scandal that needs to be looked at,” he said. “The scandal is in the thousands, but could be in the tens of thousands.”

(Updates with stock reaction in Tokyo from fourth paragraph.)