The Post Office could be forced to pay more than £1bn to 1,300 postmasters that are claiming to be wrongly-accused of theft.

A group court case of the first 523 postmasters begins next month. They allege that they have been blamed for serious accounting errors made by the company’s Horizon computer system since 1999, which resulted in many losing their jobs and being forced to pay back thousands of pounds, while some were imprisoned.

If successful, the first case could lead to £500m in damages being awarded to those affected, with a similar amount expected for the second case.

According to Communications Workers Union postmaster branch secretary Mark Baker, the court case could open the floodgates to a “PPI-like claims system”. He added: “Any overturn of convictions will have serious ramifications for not just the Post Office, but the British justice system.”

Baker told Retail Express that the Post Office may require Government aid in order to make the payments.

The Post Office strongly denies any wrongdoing.

A Post Office spokesperson said the Post Office is defending the case: “As we said when the group litigation order was made by the court earlier this year, we welcome it as offering the best opportunity for the matters in dispute to be heard and resolved.

“We will be continuing to address the allegations through the court’s processes and will not otherwise comment on litigation while it is ongoing.”

Lynn Eccles, director of communications at the National Federation of SubPostmasters, added: “We welcome the court’s scrutiny of this matter. It is inappropriate to comment further ahead of the case being heard.”

Tracey’s Story

Former Yetminster shop and post office owner Tracey Merritt told Retail Express her case against the Post Office is about “getting my life back and clearing my name”.

When Tracey’s Horizon computer showed thousands of pounds missing from her books, she claimed the Post Office says she stole the money and began a criminal investigation against her. However, Tracey says the missing money is an error made by the computer system.

She alleges the investigation led to several deeply upsetting incidents, including being locked in the secure area of the post office “for hours”.

Describing another incident, she claims: “They told me what prison they were going to send me to. They said if I didn’t admit it they would go after my daughter.”

The Post Office dropped the charges, but she says the attempt destroyed her reputation.

“I got spat at in the street, I got abuse, I got turned down for jobs. People will stop and say to me in the streets ‘once a thief, always a thief’.”

Tracey lost her shop, suffers from stress-induced shingles and owes £75,000 in debt.

“I have days where I’m completely destroyed,” she adds, “but I’ll continue to fight because I want my name cleared.”