What is Britain's Post Office scandal?

LONDON, Jan 9 (Reuters) - One of Britain's biggest miscarriages of justice, the wrongful conviction of hundreds of Post Office workers due to faulty software, has exploded into the public domain following a TV drama, sparking demands for justice.

In a more than 20-year scandal, some postal workers were sent to prison and others lost their livelihoods and homes.

An independent inquiry as well as a police investigation into the scandal are ongoing, and top business executives and former ministers are in the firing line.

Below is a detailed look at the case:

Hundreds of postal workers at the state-owned Post Office were wrongly prosecuted or convicted between 1999 and 2015 for alleged false accounting, theft and fraud, because of a glitchy software system that incorrectly showed money missing from accounts.

Some spent time in jail while others went bankrupt, saw their marriages destroyed and some died before their names were cleared.

Managers at Post Office branches across Britain, called postmasters or postmistresses, are often at the heart of their communities, trusted individuals who handle people's savings and pensions.

The Post Office maintained for years that data from the defective Horizon computer accounting system, developed by Japan's Fujitsu and rolled out in 1999, was reliable, while accusing branch managers of theft.

The issues with Horizon, where the system would incorrectly show shortfalls in the accounts of individual branches, began to be reported to the Post Office from the early 2000s.

Over the next decade, a number of postmasters either found their Post Office contracts terminated, were made bankrupt or were jailed after being found guilty of stealing money.

In 2009, trade publication Computer Weekly reported the claims of flaws with Horizon, alongside the postmaster prosecutions.

Amid mounting pressure from the media and lawmakers, the Post Office began to investigate the issue, but in 2015, its boss Paula Vennells told a parliamentary committee that there had been no evidence of any miscarriage of justice.

In late 2019, the Post Office agreed to settle claims made by 555 sub-postmasters. However, many of the victims found the amount paid in compensation was outweighed by legal fees.

The government says roughly 138 million pounds ($175 million) have so far been paid out to over 2,700 claimants across three separate Post Office compensation schemes.

Still, many postmasters are yet to receive compensation or have their convictions quashed.

No senior Post Office staff have been punished to date.

Vennells, who received more than 4.5 million pounds in salary and bonuses during her seven-year tenure, stepped down in 2019 before the Post Office agreed to pay 58 million pounds in a settlement with 555 sub-postmasters.

In 2021 she resigned from the boards of two retailers after 39 sub-postmasters had their criminal convictions overturned, saying her past at the Post Office had become a distraction.

Vennells said she had listened to growing calls to return her CBE, an honour bestowed in 2019 for services to the Post Office and charity, since the broadcast of "Mr Bates vs The Post Office", the ITV drama about the scandal.

She said she would do so with immediate effect.

Former postal affairs minister Ed Davey has also come under the spotlight. The now leader of the small Liberal Democrats party refused to meet sub-postmaster Alan Bates in May 2010, saying in a letter that it would not serve any useful purpose.

Davey, who later met Bates but did not intervene in any of the cases, said he was "clearly misled" by Post Office executives.

Fujitsu, which has continued to win multiple British government contracts, says it is "fully committed" to supporting an ongoing independent public inquiry. It says it has apologised for its role in a scandal that has had a "devastating" impact on people's lives.

Prime Minister Sunak said his government was considering a move to exonerate wrongfully convicted postmasters, calling the scandal an "appalling miscarriage of justice."

Separately, an independent public inquiry led by a former high court judge is gathering evidence from postal workers, the government, the Post Office, Fujitsu and others. The inquiry is expected to conclude later this year.

London's Metropolitan Police has also confirmed it is conducting its own investigation into the Post Office over potential fraud offences arising from the wrongful prosecutions.

Post Office minister Kevin Hollinrake has said the government is looking at options to speed up appeals and Justice Secretary Alex Chalk is consulting senior judges about the next steps.