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Government loses £700m IT legal case with Fujitsu

The NHS has lost a £700m court battle with electronics giant Fujitsu over the failed NHS National Programme for IT, a project that aimed to deliver fully electronic national computer records within the NHS, reports the BBC.

The NHS National Programme for IT was a project conceived by the NHS in 2002, and sought to revolutionise the use of technology within the NHS, by delivering a series of linked IT systems that would pave the way for fully electronic health records for all NHS patients.

The NHS operates on a system of paper notes, which are stored in vast numbers by every care provider, including GPs, hospitals and clinics.

The paper note system has worked since the inception of the NHS, but is widely regarded as cumbersome, with patients accruing several volumes of notes over the course of their lifetimes, which are often unsearchable and which must be posted to a new hospital or GP each time the patient moves.

The NHS IT project envisaged a central database of notes, accessible by all 30,000 GPs in England and Wales, and from all 300 hospitals.

The project was fraught with issues from the beginning, however, and after many years of wrangling the project was finally scrapped in 2008.

Fujitsu are understood to be claiming almost the full cost of delivering the project - around £700m out of a total cost of £896m that Fujitsu quoted for successfully completing the project.

The parties had attempted to negotiate a settlement back in 2010; however, neither the Government nor Fujitsu could agree on a compensation amount, so they have gone to arbitration to determine the way to proceed.

Arbitration is often used in complex technical industrial disputes as it offers companies a cheaper and faster way to obtain an independent hearing and settlement. Arbitrators are often highly qualified professionals who are able to analyse complex facts and reach a decision quickly.

Arbitration is also favoured as it is entirely secret, meaning the details of the case are kept away from the public.

The legal bill for fighting against Fujitsu is estimated at £31.5m.

Conservative MP Richard Bacon said the settlement figure was likely to be lower than £700m, but added that whilst the Government had enjoyed secrecy during the arbitration process, it would not be able to avoid publishing the amount it had paid in settlement of the case.

"I don't know how the Government can honestly keep this number quiet. It simply cannot do it. It is not possible or sensible to keep it quiet when you are spending this much money," he told the BBC.