By Andrew MacAskill

LONDON (Reuters) – Britain said on Tuesday it would increase compensation for postal workers wrongly convicted of fraud in one of Britain’s biggest ever miscarriages of justice.

Between 2000 and 2014, hundreds of postal workers were prosecuted after a software error in the Horizon IT system caused gaps in accounting.

Some were sent to prison, others lost their livelihoods and homes. Many went bankrupt, marriages were destroyed and some died before their names were cleared.

The government has announced a new compensation scheme for those who first took legal action against the Post Office over its failings.

In December 2019, the Post Office agreed to settle claims from 555 postmasters, but many victims felt the amount of compensation was too high due to legal fees.

Despite receiving almost £43 million ($56.85 million) in damages, many workers were left with around £20,000 after legal costs, based on a no win, no fee agreement with a company that funded the lawsuit.

The legal action meant that some workers were not eligible to apply to the Post Office for workers compensation. The new government compensation scheme ensures that they now receive the same level of payouts.

“While it cannot undo years of misery, the postmasters who suffered terribly as a result of the Post Office Horizon scandal deserve fair compensation,” said Prime Minister Boris Johnson.

“That is why we are introducing a new compensation scheme for those who led and won the historic lawsuit over the shortcomings, so that they can receive their fair share.”

The Post Office has maintained for years that data from the faulty computer accounting system was reliable and accused branch managers of theft.

($1 = 0.7564 pounds)

(Reporting by Andrew MacAskill, Editing by Elizabeth Piper and Andrew Cawthorne)