The Post Office and Fujitsu agreed to a deal 19 years ago to fix transaction errors in sub-postmasters’ accounts caused by a bug in the Horizon IT system, a document revealed.
An agreement was reached in 2006 to correct errors caused by bugs in the software, or failing to do so, Fujitsu would have to pay the Post Office up to £150 per transaction.
This revelation directly contradicts the Post Office’s claims during criminal trials – which led to hundreds of wrongful convictions and civil cases that destroyed livelihoods – that no bugs existed capable of causing accounting deficiencies.
It also reveals that the Post Office was aware nearly two decades ago of Horizon’s unreliability in accurately recording transactions.
Between 1999 and 2015, more than 900 sub-postmasters were wrongfully prosecuted because a faulty Horizon IT system made it appear that money was missing from branch accounts.
Some sub-postmasters went to jail, while many others were financially ruined and lost their livelihoods. Others died.
It has been described as the largest miscarriage of justice in British legal history and led to a long-running public inquiry into the scandal.
Countless pieces of evidence and testimony have been heard, examined and reported during the inquiry, but a document revealed in the material published this month contained new, previously unknown information.
The document shows that the sub-postmasters were not aware that both parties had a financial structure in place for managing the discrepancies and for Fujitsu to fix the problems or pay for them.
The Post Office denied during the criminal trials of sub-postmasters that errors or bugs could have led to the decline in transactions in branch accounts.
The court also denied the possibility of remote changes to branch accounts without the sub-postmasters’ knowledge.
The document indicates that formal commercial arrangements were established to address potential mismatches or “discrepancies,” and when Fujitsu’s system was found to be responsible, it was expected to correct false transactions or pay “liquidated damages.”
The Post Office made this claim to the media and Parliament in 2015.
The revelations also undermine the Post Office’s claim to the media and Parliament in 2015 that it would not have been possible for Fujitsu to alter the transactions of sub-postmasters without their knowledge.
Paul Marshall, senior barrister for sub-postmasters, said, “The Post Office conducted both the postmasters’ criminal trial and the 2019 group litigation on the basis that it knew of no major problems with the Horizon system.”
He added, “Yet this shows that there was a very large, recognised problem with Horizon in maintaining data integrity between Post Office branch offices and Fujitsu in 2006.”
“The Post Office has been saying for 20 years that the only reason for the shortfall in branch accounts is the incompetence or dishonesty of the postmaster.
“But the maintenance of data integrity was fundamental to the Post Office-Fujitsu contract – Fujitsu was unable to provide or assure it.”
The document clearly acknowledges that data held on Horizon’s servers at Fujitsu’s headquarters may fail to match transactions conducted by sub-postmasters at their branches.
This further demonstrates that the Post Office was aware that sub-postmasters could access their branch accounts remotely. For example, in the landmark
In the Alan Bates vs. Post Office case, the organisation insisted that the software could not be accessed remotely by any other party.
Under the arrangements set out in the document, Fujitsu agreed to perform a “reconciliation service” with the approval of the Post Office where it was required. Pay up to £150 per transaction to fix errors caused by bugs or defects or a penalty known as “liquidated damages.”.
The document dates back to four months ago, when the Post Office launched legal action against sub-postmaster Lee Castleton OBE.
seeking to recover £25,000 in cash, which it alleged was missing from its branch in East Yorkshire.
He represented himself in court, arguing that Horizon’s problems were to blame, but lost and suffered £321,000 in legal costs and became bankrupt as a result.
Mr Castleton is now suing the Post Office and Fujitsu for damages and says the document will help his fight.
He told the BBC, “This is a disgusting document. This document exemplifies the continued concealment of the truth over two decades. “The victims have suffered all this pain and punishment over so many years, and it has been suppressed.”
“It physically makes me feel miserable to think that they were doing this and not telling anyone… It’s time for them to be held accountable for all of those actions.”
The document, which was first discovered by Post Office scandal campaigner Stuart Goodwillie, backs up what whistleblower Richard Rolle told BBC Panorama in 2015.
The former Fujitsu worker said the team working at Horizon would sometimes correct thousands of transactions per night because failing to do so could force the firm to pay cash to the post office.
The agreement also states that Fujitsu can and will amend transaction data, with the Post Office required to approve the entries. We found a later version of the contract, which changed this condition to “where it is possible”.
The document is listed in an annexe to two corporate witness statements provided by Paul Patterson, Fujitsu’s current European chief executive, due in 2024 but only recently published.
The contents of the document have stunned scam experts, such as Second Sight forensic accountant Ron Warmington, who described the implications as “dynamite.”
A Fujitsu spokesperson said, “These matters are the subject of a forensic investigation by Post Office Horizon IT Investigations and while this process is ongoing, it is not appropriate for us to comment.”
A Post Office spokesperson said, “We unreservedly apologise for the hurt and pain caused to so many people by the Post Office during the Horizon IT scandal.
“Today, our organization is focused on working transparently with the ongoing public inquiry,
paying full and fair financial redress to those affected, and establishing a meaningful restorative justice programme, all of which are important elements of the Post Office’s ongoing transformation.”
