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Everything you need to know about the Post Office Horizon scandal

Mr Bates vs the Post Office told the true story of the Post Office Horizon scandal
Mr Bates vs the Post Office, the ITV drama, retold the story of the Post Office Horizon scandal - ITV/Shutterstock

The row over the Post Office scandal and the hundreds of victims who are yet to be fully compensated has dominated headlines.

Here are the answers to questions you may have about the Horizon row, which still shows no sign of abating.

What caused the Post Office scandal?

The rollout of Horizon computing software - manufactured by Japanese company Fujitsu - across UK Post Office branches led to the prosecution of more than 900 sub-postmasters between 1999 and 2015. Faults in the software made it look like money was missing and sub-postmasters were charged with theft and false accounting as a result. Some were ordered to undertake community service or sent to prison and four are known to have taken their own lives.

What did sub-postmasters do when they found out they had shortfalls?

The Post Office ordered sub-postmasters to pay back money that was lost or face prosecution if they did not comply. They were contractually obliged to make up for the “losses” with their own funds. This resulted in some losing their livelihoods and going bankrupt as a result.

What happened to the extra money which was paid in?

Forensic accounts have said that the extra money paid in by worried sub-postmasters was likely credited to the Post Office’s profit and loss account. If this was the case, then the Post Office would have declared larger profits or smaller losses that it should have done and would have needed less government subsidy as a result. If so, then the taxpayer inadvertently benefited from money wrongly taken from sub-postmasters.

When were the shortfalls attributed to the faulty computer software system?

It wasn’t until December 2019 when a High Court judge ruled that Horizon contained “bugs, errors and defects” and there was a “material risk” that shortfalls in Post Office branch accounts were caused by the system.

How many sub-postmasters have had their convictions overturned since the 2019 judgment?

So far, 93 sub-postmasters have had their convictions overturned, but hundreds more have not yet come forward.

Have any sub-postmasters received compensation?

Around £138 million has been paid out to approximately 2,700 sub-postmasters across three compensation schemes, according to the Post Office. However, hundreds of others are yet to receive a payout. In September, the Government announced that every worker whose wrongful conviction was overturned would be offered £600,000 in compensation. Those who had already received initial smaller payments or had reached a lower valued settlement with the Post Office would be paid the difference. However, some lawyers who represent victims have said that even £600,000 is not enough in all cases to make up for what has been lost over two decades.

How did the Government come up with the £600,000 figure?

The first time victims of the scandal received any money was when those involved in Bates & Others v Post Office reached an out-of-court settlement with the Post Office in 2019. The Post Office did not accept liability, so this was a costs settlement not compensation. However, the group was awarded £57.75 million in total. However, some £46 million was taken in legal costs - leaving only £20,000 for each person. In April 2021, Nick Read, the chief executive of the Post Office, urged the Government to provide funding, arguing that his organisation did not have the “financial resources” to provide meaningful compensation. The Government went on to announce that sub-postmasters wrongly convicted of offences would get interim compensation of up to £100,000 a few months later, in July 2021. In September 2023, it confirmed that those who had had their convictions overturned on the basis of Horizon evidence would be paid £600,000 in full and final settlement of their claim.

What about sub-postmasters whose convictions have not been overturned?

Without proof of the convictions having been overturned, victims cannot currently claim compensation. People with criminal convictions typically need to go through an appeal process in court and the Post Office has said it covers all fees for lawyers and experts. On Wednesday, Rishi Sunak, the Prime Minister, announced that a new law would ensure those convicted as a result of the Horizon scandal are “swiftly exonerated and compensated”. However, experts have warned that such laws could undermine the independence of the courts and judges.

ITV drama Alan Bates vs The Post Office has helped highlight the issues raised in the Horizon scandal
ITV drama Alan Bates vs The Post Office has helped highlight the issues raised in the Horizon scandal - ITV/Shutterstock

Who will fund the payouts?

So far the Government has funded the £138 million figure, but many have questioned whether Fujitsu - the firm behind the faulty software - should foot the bill. The multi-billion-pound Japanese firm typically receives more than £100 million in ongoing UK government contracts each year. On Tuesday, Mel Stride, Work and Pensions Secretary, told Good Morning Britain that he “didn’t think” there was “any working assumption at the moment” that the taxpayer would fund the compensation payments. He said decisions going forward would be based on the outcome of an independent inquiry.

When will the independent inquiry finish?

The Post Office Horizon IT Inquiry was initially set up as a non-statutory inquiry in September 2020. Following a request from Sir Wyn Williams, the Chairman of the Inquiry, it became statutory in June 2021. Statutory inquiries have certain powers - including the ability to compel witnesses to give evidence. The inquiry was initially set to conclude in August 2022 but it is still ongoing and is now due to finish this year.

Has anyone been held criminally responsible for what happened?

The Metropolitan Police launched an investigation in 2020 which saw Fujitsu experts, who were witnesses in the trials, probed for potential perjury and perverting the course of justice. Two people were interviewed under caution as a result, but nobody was arrested. However, last week the Met confirmed that the Post Office was under criminal investigation over “potential fraud offences” committed during the scandal.

Why did Paula Vennells hand back her CBE?

On Tuesday, Vennells, the former Post Office chief executive, confirmed that she would hand back her CBE, which she was awarded in 2019 for services to the Post Office and charity. Her decision came after mounting calls for her to be stripped of the honour.

Paula Vennells ran the Post Office while it routinely denied there was a problem with its Horizon IT system
Paula Vennells ran the Post Office while it routinely denied there was a problem with its Horizon IT system - Anthony Devlin

What else do campaigners want Paula Vennells to do?

Campaigners would like to see Ms Vennells return the £2.93 million she received in performance-related bonus payments in lieu of a pension. Overall, she is understood to have been paid as much as £5 million in total during her tenure as the chief executive of the Post Office between 2012 and 2019.

Why has the scandal come to light again?

Newspapers, broadcasters and websites, including The Telegraph, have reported on the scandal over the years. However, the scandal has come to public attention again following the release of ITV’s drama Mr Bates vs. The Post Office, which is the channel’s most popular drama in three years.

Who is Alan Bates?

Alan Bates was a sub-postmaster who was accused of theft when his accounts showed a shortfall. He first reported issues with Horizon in 2000 and eventually had his contract terminated in 2003 when he refused to comply with his obligations to pay back the “losses” from his own pocket. Mr Bates led the campaign group Justice for Subpostmasters Alliance to its High Court victory in 2019.

Will everyone get justice?

At least 33 victims of the scandal have already died without receiving compensation. Campaigners warn many involved are only getting older and that it is crucial action is taken quickly.