Dozens of former subpostmasters have begun a court of appeal challenge against their convictions for theft, fraud and false accounting they claim was due to computing errors.

In a 15-year period from 2000, more than 900 postmasters were prosecuted after the Horizon IT system installed by the Post Office and supplied by Fujitsu falsely suggested there were cash shortfalls.

Some of those accused were jailed, and many faced financial difficulties as they struggled to rebuild their lives with a criminal record.

The Criminal Cases Review Commission (CCRC) referred the cases of 42 former subpostmasters to the court of appeal last year, after a landmark civil case against the Post Office.

A high court judge found the Fujitsu-developed Horizon system contained “bugs, errors and defects” and that there was a “material risk” shortfalls in branch accounts were caused by the system.

The Post Office settled the civil claim brought by more than 550 claimants for £57.75m, without admitting liability, in December 2019.

Opening the appellants’ case on Monday, Tim Moloney QC said: “Essentially the Post Office in the face of all the evidence was prepared to accept that subpostmasters of previous good character, who had hitherto run decent responsible profitable businesses, became criminals overnight. Alarm bells should have rung.”

He told the court that the Post Office had conceded that 39 of the 42 appellants’ appeals should be allowed, on the basis that “they did not or could not have a fair trial”.

He said many of those 39 appellants had “pleaded guilty in the face of the difficulties that they faced in defending themselves, being deprived of any meaningful way of defending themselves”.

Moloney told the court: “All had the shame and humiliation of arrest and prosecution. All experienced the enormous psychological toll associated with that process.

“Some saw their marriages break up, others suffered bankruptcy and some are dead, having gone to their graves with their previous convictions still extant.”

He said “similar damage” was caused to a number of other subpostmasters, whom he said were “blameless individuals”, whose cases are not before the court this week.

Moloney said this “extensive damage” was “caused by unfair recovery of alleged debt and unfair trials stemming from the defective software and an abject failure on the part of the respondents to effectively assess, let alone effectively address, the defects in that software”.

He also said there were concerns about the Horizon system from the outset. Moloney argued that “the very highest levels of management and governance in the Post Office were on notice of the real potential for Horizon to malfunction and misfire”.

But, he added, the Post Office “chose to disbelieve the subpostmasters … It chose to ignore the distress that was being suffered by those subpostmasters.”

The Post Office is opposing 35 of those 39 cases on a second ground of appeal, which is that the reliability of Horizon data was “essential to [their] prosecution and conviction” and their convictions were therefore “an affront to the public conscience”.

Four of the 42 appeals are not being opposed on either ground, while three are fully opposed by the Post Office, which has previously said it will not seek retrials of any of the appellants if their convictions are overturned.

The hearing before Lord Justice Holroyde, Mr Justice Picken and Mrs Justice Farbey is expected to conclude on Thursday or Friday and it is expected they will give their ruling at a later date.

Last year the Post Office apologised for what it called historical failings and said the organisation would cooperate with the CCRC, which referred the cases to the court of appeal for re-examination.

Janet Skinner, 50, who was jailed for nine months in 2007 after pleading guilty to false accounting, said: “It feels like the beginning of the end here today. Obviously we don’t know which way it’s going to go, it’s in the hands of the judges now. The Post Office feels like too big a company to be messing with when you’re on your own.

Skinner, from Hull, described her prison ordeal as awful. She said: “I had two teenage children at the time and so I refused to let them see me in jail. I didn’t want them to have a memory of that. It was tough.”