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New legislation will clear and compensate sub-postmasters who were the victims of what has been called the UK’s most widespread miscarriage of justice.

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

The next phase of a public inquiry into what went wrong begins on Tuesday.

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.

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 went to prison for false accounting and theft. 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.

A draft report uncovered by the BBC shows the Post Office spent £100m fighting the group in court despite knowing its defence was untrue. The Post Office said it would be “inappropriate” to comment.

And although campaigners won the right for cases to be reconsidered, only 95 convictions had been overturned by mid-January 2024.

The Criminal Cases Review Commission said the scandal was “the most widespread miscarriage of justice” it had seen.

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.

It resumes on Tuesday 9 April and is due to last several weeks, with campaigner Alan Bates and former Post Office chief executive Paula Vennells among those due to give evidence during this phase.

Politicians who had responsibility for overseeing the Post Office will also appear.

More on the Post Office scandal

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.

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

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.

Victims of the Post Office scandal tell their own stories of how they were accused of criminality.

What is the government doing for the victims?

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

New legislation was introduced on 13 March, to speed up clearing victims’ names and paying compensation.

Prime Minister Rishi Sunak told MPs “We will make sure that the truth comes to light.”

The law, which applies to convictions in England and Wales, is expected to clear most victims by the end of July.

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

The government said a new scheme will process compensation applications “as soon as possible” for those whose convictions are quashed.

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

Downing Street previously said it would work with Scotland and Northern Ireland to ensure people wrongly accused in those nations would also be cleared.

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?

Former Post Office chief executive Paula 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 for his work on the Horizon inquiry.

Fujitsu Europe director Paul Patterson told the Post Office Inquiry that the firm had a “moral obligation” to help fund compensation payments.

Lib Dem leader Sir Ed Davey has been criticised for refusing to meet Alan Bates, the sub-postmaster who led the campaign, 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 election”.