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While the Post Office and its mistreatment of subpostmasters – wrongly punished for theft and false accounting – is headline news after the group litigation over the Horizon IT system drew to a close, the IT services company behind the system faces further questions.
The Post Office was in the dock in the multimillion-pound group litigation, but it was not the only organisation in the spotlight, with Fujitsu also emerging from the case tarnished.
Fujitsu’s customers and partners, as well as industry analysts, will need reassurances about the company’s staff and methods, after High Court judge Peter Fraser tore into some of the evidence given by the supplier’s staff in the latest court case and previous trial.
Fraser said some staff giving evidence were protecting Fujitsu rather than giving accurate information and he questioned whether Fujitsu had been accurate in reporting to its customer, the Post Office.
The second trial in the group litigation, Bates and Others vs Post Office, examined the Post Office’s claim that Fujitsu’s Horizon system used in branches was robust and not to blame for accounting inaccuracies. Horizon was introduced in 1999/2000, and is used by about 12,000 Post Office branches.
Following an out-of-court settlement between the two parties, the judgment for the second trial, which examined whether Horizon could have been to blame for the accounting shortfalls, was handed down by Fraser, who ruled unequivocally that the system was not robust.
The Post Office was rightly chastised by Fraser for treating subpostmasters in a way not unlike Victorian factory workers, and refusing to accept that Horizon could be at fault, to such an extent that the judge said it “amounts to the 21st century equivalent of maintaining that the Earth is flat”.
Concerns over accuracy
Fujitsu did not escape criticism. Before handing down his judgment, Fraser announced his concerns over the accuracy of evidence given in court by Fujitsu in previous trials of accused subpostmasters.
He said: “Based on the knowledge that I have gained both from conducting the trial and writing the Horizon issues judgment, I have very grave concerns regarding the veracity of evidence given by Fujitsu employees to other courts in previous proceedings about the known existence of bugs, errors and defects in the Horizon system. These previous proceedings include the High Court in at least one civil case brought by the Post Office against a subpostmaster and the Crown Court in a greater number of criminal cases, also brought by the Post Office against subpostmasters and subpostmistresses.”
Fraser sent papers from the case to the director of public prosecutions, Max Hill, to consider whether the matter should be the subject of any prosecution. This could lead to criminal prosecutions for crimes such as perjury.
The Criminal Courts Review Commission is also reviewing applications for a retrial of 34 subpostmasters who were convicted in previous trials.
Following the latest judgment, Fujitsu said in a statement: “On 16 December, Mr Justice Fraser published his judgment on the second trial of the Post Office group litigation. While Fujitsu was not a party to the litigation, we take this judgment very seriously and will now review the findings in detail.”
The IT supplier will have to analyse why its staff provided inaccurate information to the court, and revisit its communication with the Post Office.
Fraser said in his judgment: “As will be seen from my analysis of the Fujitsu evidence of fact, I have certain views about the lack of accuracy on the part of Fujitsu witnesses in their evidence. If that lack of accuracy has also been included in reporting to the Post Office by Fujitsu, then that goes some way to explaining the Post Office’s lack of grasp of so much material that is consistent with the claimants’ case.”
During the trial, Fujitsu staff who gave evidence in the Post Office’s defence included Stephen Parker, head of Fujitsu Post Office application support; Andy Dunks, Fujitsu IT security analyst; and Torstein Olav Godeseth, Fujitsu’s chief architect working with Post Office Horizon.
Former senior Fujitsu executive, Gareth Jenkins, who is now retired was not in court, but a significant amount of evidence provided by witnesses came from him.
‘Left rather exposed’
The judge said that at one point, Parker was “left rather exposed in terms of the accuracy of this evidence when it was shown that the points that he had been addressing in this part of the cross-examination – some of which he would not accept – were taken from a Fujitsu internal document, which he had himself drafted”.
Fraser added: “This refusal by Mr Parker to accept his own previously drafted points in what I consider to be an important contemporaneous document also paints him in a very poor light as a credible witness.”
One senior corporate lawyer, specialising in IT outsourcing, questioned why Fujitsu staff might provide misleading evidence, saying: “For a staff member at an IT supplier to mislead a court could be that it was protecting the customer, but more likely itself.”
Fraser said: “Even making allowance for the natural reaction of an employee to wish to protect his employer’s interests, which many people may have subconsciously, I find that Mr Parker’s evidence to the court was inaccurate to a significant degree.”
Fraser also said Dunks had sought to mislead him by stating that there was no Fujitsu “party line” when it came to the contents of drafting witness statements about audit records for legal proceedings. “There plainly is,” said the judge. “It was used in the Fujitsu statements in 2010 and it was used by him in his statement for the Horizon issues trial.”
He added: “I found Mr Dunks very unsatisfactory as a witness. He was both plainly aware of the Fujitsu party line, or corporate position, regarding the words asserting accuracy of audit data, and he was very anxious to keep to it, while initially denying that there was one.”
This raises questions and could even see the Post Office, as the customer, seek answers from Fujitsu. Peer James Arbuthnot, a staunch critic of the Post Office over the Horizon scandal, said: “It may well be that the Post Office may feel let down by Fujitsu, but it is certain that the subpostmasters will. Might they have a cause of action against Fujitsu for a breach of Fujitsu’s duty of care?”
Fujitsu has long been a major IT supplier to the UK government, including in its previous incarnation as ICL. The company provided IT systems to collect taxes and pay benefits for many years, and today it still works with a number of government departments. Back in 2012, Fujitsu was one of two IT companies labelled as high-risk by the UK government to alert all departments if a supplier has performed poorly.
Other questions about Fujitsu’s service levels could be put forward by customers. Evidence in court from Richard Roll, a former Fujitsu employee turned whistleblower appearing as a witness for claimant subpostmasters, revealed that teams at the company were under pressure to keep costs down.
Roll worked in the software service centre (SCC) serving the Post Office for Fujitsu. He said during his time at Fujitsu, there were budget pressures and redundancies that affected system development and testing.
“The test team felt they were under enormous pressure to complete the testing within certain timescales, which negatively affected the test regime,” he said. “Meanwhile, the development team had to balance time spent on fixes with time spent on developing new features for legacy Horizon and time spent developing a new system, which I believe later became Horizon Online.
“In my first statement, I refer to the pressure that the SSC team and Fujitsu were under generally due to an awareness of the financial penalties imposed by the service level agreements between the Post Office and Fujitsu. I believe that although individual penalties were quite modest, when applied across multiple counters/post offices, the cumulative figures involved were very high, potentially amounting to tens of millions or more.”
In his witness statement, Fujitsu’s Parker said the potential financial penalties were not a factor for the SSC. But Roll said: “We were aware of them and often commented on them, for example, ‘That’s saved Fujitsu another £25m’.”
The Post Office settled the group litigation out of court with about 550 subpostmasters who had suffered financial losses and even loss of liberty after being blamed for accounting shortfalls caused by the Horizon retail and accounting system, from Fujitsu, that they use to run their branches. The Post Office was forced to apologise to the subpostmasters and pay £58m in damages, among other concessions. The Post Office’s costs for fighting the case have amounted to tens of millions of pounds.
Computer Weekly first reported the problems with Horizon in 2009, when it made public the stories of a group of subpostmasters. Soon after this, as more subpostmasters came forward, Alan Bates formed the Justice for Subpostmasters Alliance and began campaigning. Bates had first contacted Computer Weekly in 2004 and had first alerted the Post Office to the problems in 2000.
After years of campaigning, Bates and others forced a group litigation against the Post Office and, after the second trial of four that were planned, claimed victory when the Post Office settled with claimants.
Timeline of the Post Office Horizon case since Computer Weekly first reported on it in 2009
- May 2009: Bankruptcy, prosecution and disrupted livelihoods – postmasters tell their story.
- September 2009: Postmasters form action group after accounts shortfall.
- November 2009: Post Office theft case deferred over IT questions.
- February 2011: Post Office faces legal action over alleged accounting system failures.
- October 2011: 85 subpostmasters seek legal support in claims against Post Office computer system.
- June 2012: Post Office launches external review of system at center of legal disputes.
- January 2013: Post Office admits Horizon system needs more investigation.
- January 2013: Post Office announces amnesty for Horizon evidence.
- January 2013: Post Office wants to get to bottom of IT system allegations.
- June 2013: Investigation into Post Office accounting system to drill down on strongest cases.
- July 2013: Post Office Horizon system investigation reveals concerns.
- October 2013: End in sight for subpostmaster claims against Post Office’s Horizon accounting system.
- October 2013: Former Lord Justice of Appeal Hooper joins Post Office Horizon investigation.
- November 2013: 150 subpostmasters file claims over ‘faulty’ Horizon accounting system.
- September 2014: Fresh questions raised over Post Office IT system’s role in fraud cases.
- December 2014: MPs blast Post Office over IT system investigation and remove backing.
- December 2014: Why MPs lost faith in the Post Office’s IT investigation, but vowed to fight on.
- December 2014: MPs to debate subpostmaster IT injustice claims.
- December 2014: MP accuses Post Office of acting “duplicitously” in IT investigation.
- January 2015: MPs force inquiry into Post Office subpostmaster mediation scheme.
- January 2015: Post Office faces grilling by MPs over Horizon accounting system.
- February 2015: Post Office CIO will talk to any subpostmaster about IT problems, promises CEO.
- March 2015: Post Office ends working group for IT system investigation day before potentially damaging report.
- March 2015: MPs seek reassurance over Post Office mediation scheme.
- March 2015: Retiring MP aims to uncover truth of alleged Post Office computer system problems.
- April 2015: Post Office failed to investigate account shortfalls before legal action, report claims.
- April 2015: Criminal Courts Review Commission set to review subpostmasters’ claims of wrongful prosecution.
- May 2015: IT system related to subpostmaster prosecutions under review by CCRC.
- June 2015: Post Office looking to replace controversial Horizon system with IBM, says MP.
- July 2015: Campaigners call for independent inquiry into Post Office Horizon IT system dispute.
- October 2015: James Arbuthnot takes Post Office IT fight to House of Lords.
- November 2015: The union that represents Post Office subpostmasters has warned of a problem with the Horizon accounting system.
- November 2015: An email from Post Office IT support reveals a problem with the Horizon system and supporting processes that could lead to accounting errors.
- November 2015: Group litigation against Post Office being prepared in Horizon dispute.
- February 2016: Post Office faces group litigation over Horizon IT as subpostmasters fund class action.
- June 2016: Post Office chairman Tim Parker says there would be “considerable risk” associated with changing its Horizon computer system.
- November 2016: The legal team hired by a group of subpostmasters will take their case to the next stage.
- January 2017: The group action against the Post Office that alleges subpostmasters have been wrongly punished for accounting errors gets a green light from the High Court of Justice.
- March 2017: 1,000 subpostmasters apply to join IT-related group litigation against Post Office.
- April 2017: Investigation into claims of miscarriages of justice in relation to a Post Office accounting system has appointed a forensic accountant firm.
- May 2017: Hundreds of subpostmasters have applied to join IT-related legal action since March.
- July 2017: Post Office defence in computer system legal case due this week.
- August 2017: Campaigners submit initial evidence in group litigation against Post Office over controversial Horizon IT system.
- October 2017: Subpostmasters’ group action against the Post Office reaches an important milestone.
- November 2017: An end is in sight for subpostmasters’ campaign against alleged wrongful prosecution, which they blame on a faulty computer system.
- November 2017: The High Court judge managing the subpostmasters versus Post Office legal case over an allegedly faulty computer system tells legal teams to cooperate.
- January 2018: Forensic investigation into Post Office IT system at centre of legal case nears completion.
- April 2018: Criminal Cases Review Commission forensic examination of the IT system at the centre of a legal case against the Post Office has raised further questions.
- May 2018: Post Office branches unable to connect to Horizon computer system for several hours after morning opening time.
- October 2018: After over a decade of controversy, next week marks the beginning of a court battle between subpostmasters and the Post Office.
- November 2018: Case against Post Office in relation to allegedly faulty computer system begins in High Court.
- November 2018: High Court case in which subpostmasters are suing the Post Office has revealed a known problem with a computer system at the core of the dispute.
- November 2018: A High Court trial, where subpostmasters are suing the Post Office for damages caused by an allegedly faulty IT system, ends second week.
- November 2018: Post Office director admits to Horizon errors and not sharing details with subpostmaster network.
- November 2018: The High Court trial in which subpostmasters are suing the Post Office has reached an important stage.
- December 2018: CCRC may hold off subpostmaster decision until after Post Office Horizon trial.
- December 2018: Court case where subpostmasters are suing the Post Office set to span at least four trials and extend into 2020.
- January 2019: Subpostmasters’ campaign group attacks Post Office CEO Paula Vennells’ New Year honour amid ongoing court case.
- January 2019: Thousands of known errors on controversial Post Office computer system to be revealed.
- March 2019: Tech under spotlight at High Court in second subpostmasters versus Post Office trial.
- March 2019: Post Office considered Horizon IT system “high risk”, court told.
- March 2019: CCRC watching Post Office Horizon trial closely.
- March 2019: Judge rules that Post Office showed “oppressive behaviour” in response to claimants accused of accounting errors they blamed on Horizon IT system.
- March 2019: Post Office ‘lacked humanity’ in the treatment of subpostmasters, says peer.
- March 2019: A High Court judge heard that the Post Office did not investigate a computer system error that could cause losses, despite being offered evidence.
- March 2019: The Post Office legal team in the case brought by more than 500 subpostmasters has called for the judge to be recused after questioning his impartiality.
- March 2019: A senior civil servant asked the Post Office to repay public money it had wrongly allocated to paying legal costs.
- April 2019: Subpostmaster claimants’ legal team makes application for the Post Office to pay millions of pounds of costs associated with trial.
- April 2019: Post Office to appeal judgment from first Horizon trial.
- April 2019: The Post Office’s claim that the judge overseeing the case concerning its controversial Horizon IT system was biased has been dismissed – but will now be considered by the Court of Appeal.
- April 2019: MP questions government over Post Office Horizon case.
- April 2019: Government says no conflict of interest in trial despite Post Office chairman’s dual role.
- May 2019: The Court of Appeal has refused the Post Office’s application to appeal a major decision in the Horizon IT trial.
- May 2019: The Post Office has applied for permission to appeal judgments from the first trial in its IT-related legal battle with subpostmasters.
- May 2019: The judge in the Post Office Horizon trial has ordered the organisation to pay the legal costs of its courtroom adversaries, and refused to give permission to appeal a major judgment.
- June 2019: Post Office asks Court of Appeal for permission to appeal judgment in first Horizon trial.
- July 2019: The Post Office has admitted that some subpostmasters are at risk of accounts not balancing due to an error it does not understand.
- July 2019: Problem revealed during High Court trial left subpostmaster with £18,000 surplus after IT system failed to register full amount of cash scanned in.
- August 2019: Subpostmasters suffering slow running and frozen terminals while Post Office searches for a fix to issues apparently caused by a software update.
- August 2019: The Post Office has fixed the latest problems with its Horizon system, affecting hundreds of branches.
- October 2019: A High Court judgment for a trial that focused on the Post Office’s IT system at the centre of a multimillion-pound litigation will be announced early next month.
- November 2019: The Court of Appeal has rejected a Post Office application to appeal judgments made in its multimillion-pound battle with subpostmasters over IT system failures.
- November 2019: Peer calls for clear-out of Post Office board after Court of Appeal confirms major court defeat.
- December 2019: The Post Office has settled its long-running legal dispute with subpostmasters, and will pay £57.75m in damages.
- December 2019: Subpostmasters ended their legal battle with the Post Office at the optimal time, according to the lawyer that managed the High Court action.
- December 2019: Subpostmasters proved right on IT system failures as calls for full public inquiry mount.
- December 2019: Criminal Courts Review Commission to review Horizon judgment ‘swiftly’.
- December 2019:National Federation of Subpostmasters cries foul after court ruling on controversial computer system.
- December 2019:Former Post Office CEO apologises to subpostmasters over Horizon scandal.
- December 2019: Call for former Post Office CEO to step down from public roles after IT court battle lost.
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