What is the Post Office’s Horizon scandal and what happens next?

Here the PA news agency looks at the decades-long scandal and what happens next.

– Who are the subpostmasters?

Subpostmasters run Post Office branches, which are often situated inside a shop or other business, which the subpostmasters also run.

Hundreds of subpostmasters were prosecuted by the Post Office. A total of 42 cases were considered by the Court of Appeal, with 39 of them having their convictions overturned.

Six former subpostmasters previously had their convictions overturned at Southwark Crown Court in December – their cases were sent to the Crown Court because they were convicted at magistrates’ courts.

– What was the Horizon system?

Horizon is an electronic accounting system within post offices, between the branches and Post Office Limited (POL), piloted in 1999 and rolled out in 2000.

Through a computerised system, Horizon recorded all transactions at a branch and calculated how much cash and stock there should be.

The subpostmasters were required to declare each day how much cash was held at their branch and, once Horizon had been installed, staff were required to use it.

– What went wrong?

If at the end of a trading period there was a shortfall between the cash in-branch and Horizon’s figures, the subpostmaster was required to make up the difference either by putting in their own money or asking for the amount to be deducted from their future income.

The prosecutions mostly began after auditors noticed these shortfalls.

However, from an early stage, some subpostmasters were experiencing and reporting discrepancies in their accounts that they thought were caused by errors in Horizon.

In a landmark civil claim, the High Court found that Horizon had been affected by bugs, errors and defects throughout its existence, but the Post Office insisted for many years that the system was reliable.

The company instead treated the shortfall as being caused by dishonesty or carelessness from the staff, demanding repayment and bringing criminal cases against them.

The total amount of losses claimed was about £18 million, the Court of Appeal judges said in their ruling.

– What happened to the subpostmasters?

The 39 Post Office workers were accused and convicted of offences committed between 2000 and 2012, with the convictions taking place over a decade from 2003.

They were charged with offences including theft, fraud and false accounting – with many facing immediate prison sentences.

In the judgment on Friday, Lord Justice Holroyde noted “all suffered the shame and humiliation of being reduced from a respected local figure to a convicted criminal”.

However, from around March 2015, those convicted began to apply to the Criminal Cases Review Commission (CCRC) in an effort to have their cases reviewed.

Three of those who appealed, Julian Wilson, Peter Holmes and Dawn O’Connell, died before their names were cleared on Friday.

– What happened at the Court of Appeal?

The Post Office conceded that 39 of the 42 former subpostmasters should have their convictions overturned on the basis that “they did not or could not have a fair trial”.

But it opposed 35 of those 39 cases on the second ground of appeal, which is that the prosecutions were “an affront to the public conscience”.

In the four-day appeal hearing, lawyers representing subpostmasters said evidence of serious defects in the Horizon system was “concealed from the courts, prosecutors and defence”, in order to protect the Post Office “at all costs”.

The court was also told the Post Office “shredded” potentially incriminating documents relating to its defective Horizon IT system in a bid to “hide the truth”.

Sam Stein QC, who represented five of the appellants, told the court: “The Post Office has turned itself into the nation’s most untrustworthy brand … through its own behaviour and its own fault over many years.”

– What did the judges decide?

Clearing the names of the 39 former subpostmasters, Lord Justice Holroyde said the Post Office “knew there were serious issues about the reliability of Horizon” and had a “clear duty to investigate” the system’s defects.

He continued: “POL’s failures of investigation and disclosure were so egregious as to make the prosecution of any of the ‘Horizon cases’ an affront to the conscience of the court.”

The judgment added: “By representing Horizon as reliable, and refusing to countenance any suggestion to the contrary, POL effectively sought to reverse the burden of proof: it treated what was no more than a shortfall shown by an unreliable accounting system as an incontrovertible loss, and proceeded as if it were for the accused to prove that no such loss had occurred.

“Defendants were prosecuted, convicted and sentenced on the basis that the Horizon data must be correct, and cash must therefore be missing, when in fact there could be no confidence as to that foundation.”

Lord Justice Holroyde, sitting with Mr Justice Picken and Mrs Justice Farbey, also said that Post Office internal documents showed some of the cases were dismissed as “jumping on the Horizon bandwagon”.

– What has the Post Office said?

In a statement after the ruling, Post Office chairman Tim Parker said: “The Post Office is extremely sorry for the impact on the lives of these postmasters and their families that was caused by historical failures.

“Post Office stopped prosecutions soon after its separation from Royal Mail a decade ago and has throughout this appeals process supported the overturning of the vast majority of convictions.

“We are contacting other postmasters and Post Office workers with criminal convictions from past private Post Office prosecutions that may be affected, to assist them to appeal should they wish.

“Post Office continues to reform its operations and culture to ensure such events can never happen again.”

Post Office chief executive Nick Read added: “I am in no doubt about the human cost of the Post Office’s past failures and the deep pain that has been caused to people affected.

“Many of those postmasters involved have been fighting for justice for a considerable length of time and sadly there are some who are not here to see the outcome today and whose families have taken forward appeals in their memory. I am very moved by their courage.”

– What happens next?

The Court of Appeal judges noted that the issues with Horizon affected “many hundreds” of people, so more cases are likely.

Neil Hudgell, of Hudgell Solictors, which represented 29 of the former subpostmasters who were cleared, said outside court that he was delighted for his clients and will now be contacting the Post Office to seek damages for malicious prosecution.

Mr Hudgell said his firm filed a further 34 appeals against convictions on Thursday and has another seven clients waiting in the wings.

The Post Office’s chief executive has also accepted the need for compensation for those affected.

After the judgment, Mr Read said: “The quashing of historical convictions is a vital milestone in fully and properly addressing the past as I work to put right these wrongs as swiftly as possible, and there must be compensation that reflects what has happened.”

In September 2020, the Government announced a judge-led inquiry into the scandal, however this has been criticised as it is unable to summon witnesses or cross-examine them.

On Friday, many of the cleared former subpostmasters repeated calls for a full public inquiry.

Shadow business secretary Ed Miliband and shadow justice secretary David Lammy have voiced their support.

Mr Lammy tweeted: “Justice is finally being served.

“We now need a full inquiry into how this happened in the first place.”