The Post Office and the Government have been urged to compensate workers who face “imminent financial ruin” after being falsely accused of theft, fraud and false accounting due to flaws within the Horizon accounting system.

Between 2000 and 2014, 736 subpostmasters and subpostmistresses (SPMs) were prosecuted based on information from the Horizon system, installed and maintained by Fujitsu.

However in December 2019, a High Court judge ruled that Horizon’s system contained a number of “bugs, errors and defects” and there was a “material risk” that shortfalls in Post Office branch accounts were caused by the system.

Since then dozens of SPMs have had criminal convictions overturned, and an inquiry into the scandal has been launched.

Sam Stein QC, addressing the inquiry on behalf of 151 postal workers affected by the scandal, demanded that his clients receive immediate compensation as many face “imminent financial ruin”.

“Today ex-SPMs face imminent financial ruin,” he said.

“The truth of it is people are in financial ruin. People will lose their homes unless something is done urgently to assist them.

“Some may not survive the lifetime of this inquiry due to stress-related illnesses.”

Mr Stein told the court: “This scandal has always been about money and reputation.

“On the one hand the Post Office presented a dishonest picture of its finances and its system, and sought to preserve its reputation at all costs, on the other the Post Office attacked the financial integrity of SPMs and destroyed their reputations.

“Despite the judgments in the High Court, civil court of appeal, and the court of criminal appeals, SPMs are still not in receipt of any adequate financial redress.”

The court heard of the “stigma” and “reputational loss” suffered by those falsely accused of theft, fraud and false accounting.

“All of our clients experienced terrible stigma in their communities, which in many cases remains to this date,” he said.

“In the hearings that will start next year, you will hear heart-rending accounts of those whose children were bullied or spat at.

“Those who died before their names could be cleared, and many who contemplated or attempted suicide.

“Many suffer still under the stigma of years of reputational loss.”

Mr Stein demanded that the Post Office repay the legal costs of the SPMs’ High Court civil litigation.

The inquiry may return for a further preliminary hearing, depending on submissions from all parties involved, between December 12-17 of this year, chair Sir Wyn Williams said.