Hundreds of former Post Office workers who claimed a faulty IT system led to some going bankrupt and others being prosecuted have been vindicated after a High Court ruling in their favour, their lawyers have said.

In an historic lawsuit, more than 550 people took legal action against the Post Office in a dispute that has spanned more than a decade.

They said problems with an IT system called Horizon, introduced between 1999 and 2000, caused shortfalls in their accounts, which resulted in some facing criminal charges, bankruptcy and even jail.

Last week it was announced that the Post Office had agreed to pay almost £58m to the former subpostmasters.

A post office sign
Image: The Post Office will pay almost £58m to former subpostmasters in the case

At the High Court on Monday, the claimants’ solicitor James Hartley said a judge found that on several occasions over the years “bugs, errors and defects in the Horizon system caused discrepancies in postmasters’ branch accounts”.

Mr Justice Fraser also found that the IT system was “not robust during many of the years in question” and there was a “material risk” of it being the cause of the shortfalls, he added.

Mr Hartley said: “This judgment is vindication for the claimant group of postmasters – they have finally been proved to have been right all along when they have said that the Horizon system was a possible cause of shortfalls in their branch accounts.

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“These claimants can now walk with their heads held high after all these years.”

Sky News correspondent Sarah Hajibagheri, who was in court, said the judge expressed “very grave concerns regarding the veracity of evidence given by Fujitsu colleagues” about known bugs in the Horizon system.

The government subsidy for post offices is due to end in 2021
Image: More than 550 people took legal action at the High Court

Evidence will now be sent to the director of public prosecutions to decide on action, Hajibagheri said.

Mr Hatley said the “next significant step to overall justice” for several postmasters will be the outcome of a review of more than 30 convictions by the Criminal Cases Review Commission.

The first of at least three trials over the case finished in March, with a judge resolving most issues in favour of the subpostmasters.

The subpostmasters had claimed the Post Office had not trained them properly in the IT system and that they were misled over its reliability.

They also accused it of failing to investigate the cause of the alleged shortfalls.

Some of those affected told Sky News how they fell into depression, with one saying they felt as if “I had a gun to my head” after being accused of stealing.

Balvinder Gill ran a post office in Oxford in 2003 before he was ordered to repay a massive shortfall which he says led to bankruptcy and depression.

Balvinder Gill ran a post office in Oxford in 2003
Image: Balvinder Gill ran a post office in Oxford in 2003

He told Sky News: “Every single week I had the same problems of not being able to understand the errors that were occurring. The figures on the system never matched the physical stock and cash.

“My contract was terminated but I wasn’t criminally charged because there was no evidence that I had taken the money.

“I was left broke and, to add further to my woes, I was sent a bill for £108,000.

“I went into a severe state of depression.”

The Post Office had previously insisted the Horizon system worked properly and defended the case.

However, in a statement after last week’s settlement, Post Office chairman Tim Parker admitted that “in the past, we got things wrong in our dealings with a number of postmasters”.

The Post Office’s new chief executive, Nick Read, who started his job in September, said he was “very pleased” that the two sides had been able to agree a settlement.

“Our business needs to take on board some important lessons about the way we work with postmasters, and I am determined that it will do so,” he said.

“We are committed to a reset in our relationship with postmasters, placing them alongside our customers at the centre of our business.”