Justice Secretary Alex Chalk said Fujitsu should stand ready to reimburse up to £1 billion being paid out to sub-postmasters who were wrongfully pursued because of the Japanese company's faulty Horizon software.
He also conceded that fraudsters could benefit from a new Post Office forgiveness plan, but stressed it was better to move at speed to exonerate those wrongly convicted.
The Government has paid about £138 million already to more than 2,700 claimants across three Post Office compensation schemes. But on Wednesday Rishi Sunak set aside £1 billion in total as he announced a £75,000 offer for sub-postmasters involved in a group legal action, and £600,000 for people wrongfully convicted.
If a statutory inquiry into the Post Office’s Horizon IT scandal finds the “scale of the incompetence is as we might imagine”, the Government would want to “secure proper recompense on behalf of the taxpayer”, Mr Chalk told ITV’s Peston late on Wednesday.
“It’s absolutely right that there should be justice across the piece, yes for the sub-postmasters, which we’re talking about today, but frankly also for the taxpayer. This has cost and will cost a fortune,” he said.
If Fujitsu is found to be at fault, it “should face the consequences”, he added, while stressing that the Government would await the conclusions of the inquiry chaired by retired judge Sir Wyn Williams before deciding on further action.
In 2019 the High Court ruled that Fujitsu’s Horizon contained a number of “bugs, errors and defects” and there was a “material risk” that shortfalls in Post Office branch accounts were caused by the software, not by the sub-postmasters, hundreds of whom were wrongfully prosecuted.
Despite the ruling, the Government has awarded nearly £5 billion in new contracts to Fujitsu since 2019. Lord Maude of Horsham, who served as Cabinet Office minister under David Cameron, said procurement rules had thwarted ministers’ efforts to block the new contracts.
He said that if the Japanese company had “any sense of honour” it would swiftly make a significant payment towards the compensation of wrongly convicted sub-postmasters.
Fujitsu executives will answer questions from MPs on the Business and Trade Committee next Tuesday, and at Sir Wyn's inquiry next week. The company declined to comment on Mr Chalk's warning, but has stressed it is cooperating with the inquiry.
Mr Sunak promised a new law to expedite compensation and exonerate more than 900 Post Office branch managers who were wrongly prosecuted for fraud, theft and false accounting by the government-owned company. He said they were victims of “one of the greatest miscarriages of justice in our nation’s history”.
But some lawyers including former Director of Public Prosecutions Ken Macdonald expressed concern about the blanket vindication, which will short-circuit individual appeals in the courts. He told Times Radio: "Some people who are in fact guilty will be exonerated."
Mr Chalk said: "We were faced with a series of imperfect options, and it's right to say, we have to be clear, there will be some guilty people who effectively get a windfall acquittal as a result of this.”
But the justice secretary and former prosecutor recalled the legal axiom that it is “better that 10 guilty men escape than one innocent person is made to suffer” .
“The injustice that those innocent people have faced is so great that this is an uncomfortable, this is a difficult thing to have to do, but ultimately it is the right thing to do.
“But we have to recognise there will be those guilty people - a true bill, as they say - who will be acquitted."
