Post Office Horizon scandal: Why hundreds were wrongly prosecuted

Post Office supporter outside of Royal Courts of Justice in 2021
[Getty Images]

A bill quashing the convictions of hundreds of sub-postmasters has entered into law after being brought forward due to the general election.

Many were wrongly prosecuted after faulty software said money was missing from their Post Office branch accounts.

What is the Post Office Horizon scandal?

More than 900 sub-postmasters were prosecuted for stealing because of incorrect information from a computer system called Horizon.

It has been called the UK's most widespread miscarriage of justice.

The Post Office itself took many cases to court, prosecuting 700 people between 1999 and 2015.

Another 283 cases were brought by other bodies, including the Crown Prosecution Service (CPS).

Many sub-postmasters went to prison for false accounting and theft, and many were financially ruined.

In 2017, a group of 555 sub-postmasters took legal action against the Post Office. In 2019, it agreed to pay them £58m in compensation, but much of the money went on legal fees.

Although campaigners won the right for their cases to be reconsidered, only 102 convictions had been overturned by March 2024.

The Metropolitan Police is investigating the Post Office over potential fraud offences.

How will Post Office convictions be overturned?

In January, the government said it would "swiftly exonerate and compensate" those affected.

New legislation to clear victims' names and pay them compensation was brought forward after a general election was called.

It became law on Friday 24 May and applies to England, Wales and Northern Ireland. The Scottish parliament is to pass its own bill.

Convictions will be automatically quashed if they were:

  • prosecuted by the Post Office or CPS

  • for offences carried out in connection with Post Office business between 1996 and 2018

  • for relevant offences such as theft, fraud and false accounting

  • against sub-postmasters, their employees, officers, family members or direct employees of the Post Office working in a Post Office that used the Horizon system software

Former sub-postmasters described their "joy" and "disbelief" at the move.

In an open letter, the Department for Business told those affected: "This clears your names, delivers justice, and ensures swift access to the financial redress that postmasters deserve."

The government also said a new scheme will process compensation applications "as soon as possible" for those whose convictions are overturned.

Affected sub-postmasters will receive an interim payment, or can instead accept a fixed and final offer of £600,000.

What was the effect on Post Office staff?

Many former sub-postmasters and sub-postmistresses say the scandal ruined their lives.

Some used their own money to cover non-existent shortfalls because their contracts said they were responsible for unexplained losses. Many faced bankruptcy or lost their livelihoods.

Marriages broke down, and some families believe the stress led to serious health conditions, addiction and even premature death.

What is Fujitsu's Horizon system?

Horizon was developed by the Japanese company Fujitsu, for tasks such as accounting and stocktaking.

It was introduced by the Post Office in 1999.

Sub-postmasters quickly complained about bugs in the system after it falsely reported shortfalls - often for many thousands of pounds - but their concerns were dismissed.

The Horizon system is still used by the Post Office, which describes the latest version as "robust".

What is the Post Office Horizon public inquiry?

A public inquiry began in February 2021 and has heard evidence from Post Office and Fujitsu employees.

The fifth phase began on Tuesday 9 April, with campaigner Alan Bates the first to appear.

He told the inquiry that the Post Office has spent 23 years trying to "discredit and silence" him.

Paula Vennells, chief executive between 2012 and 2019, gave evidence for three days in late May.

She began by saying sorry to the sub-postmasters and their families "who have suffered as a result of all that the inquiry has been looking into for so long".

What other Horizon compensation schemes are in place?

Post Office Minister Kevin Hollinrake previously said the government has budgeted £1bn for compensation.

More than 4,000 people were told they are eligible, under three schemes:

  • The Group Litigation Order (GLO) Scheme is for the 555 former postmasters (excluding those who had criminal convictions) who won their group lawsuit, but received relatively small payouts after legal costs. They will now be offered £75,000, but many are expected to push for more

  • The Overturned Convictions Scheme offers those eligible a fast-tracked £600,000 settlement, or the chance to negotiate a higher payment. All are entitled to an "interim" payment of £163,000

  • The Horizon Shortfall Scheme is for sub-postmasters who were not convicted, or part of the GLO court action, but who believe they experienced shortfalls because of Horizon. This group will be offered a fixed payment of £75,000

Prof Chris Hodges, chair of the the independent Horizon Compensation Advisory Board, told the BBC that some individual compensation claims were "well over £1m".

Who has been criticised for the Horizon scandal?

Ms Vennells resigned in 2019 over the scandal. In January 2024, she said she would hand back her CBE.

In August 2023, current chief executive Nick Read said he would return bonus money awarded for his work on the Horizon inquiry.

Fujitsu Europe director Paul Patterson said the firm had a "moral obligation" to help fund compensation payments.

Lib Dem leader Sir Ed Davey has been criticised for refusing to meet Mr Bates when he was postal affairs minister, in May 2010. He says he was "deeply misled by Post Office executives".

The BBC discovered that former Prime Minister David Cameron's government knew the Post Office had dropped a secret investigation that might have helped postmasters prove their innocence.

Separately, Business Secretary Kemi Badenoch denied claims from former Post Office chairman Henry Staunton that he was told to delay compensation payments to allow the government to "limp into the [next] election".