SCOTLAND’S most senior law officer has won a fight over common law immunity against a multi-million claim from ex-Rangers administrators David Whitehouse and Paul Clark over wrongful detention over allegations of fraud.
But Lord Malcolm has ruled that there remains a case to answer against the Lord Advocate under European human rights laws.
The pair from Duff and Phelps faced criminal proceedings in the wake of Craig Whyte’s 2011 Ibrox takeover from Sir David Murray and its subsequent sale before a judge dismissed the charges.
Both are suing then Lord Advocate Lord Mulholland, former Police Scotland Chief Constable Philip Gormley claiming alleged wrongful detention, arrest and prosecution based on common law and for breaches of articles 5 and 8 of the European Convention on Human Rights (ECHR)
Mr Whitehouse, 52, of Cheshire, is seeking £9 million damages and Mr Clark, of Surrey, in excess of £5 million.
Both were detained in November 2014 and later charged by police investigating the businessman Craig Whyte’s takeover of the club in 2011 But the case was dropped after a court hearing before judge Lord Bannatyne in June last year.
Lord Malcolm has ruled that there is no case to pursue the Lord Advocate in a civil action under 'common law' although the case will be examined as an alleged breach of human rights laws.
He also rejected a call by the Lord Advocate to dismiss immediately any claim under article 8 of the European Convention on Human Rights which provides a right to respect for "private and family life".
Mr Whitehouse would also be able to take a case against the former Police Scotland chief constable but Lord Malcolm said he would have to prove malicious conduct on the part of the police.
Mr Whitehouse said: "I welcome Lord Malcolm’s decision that my case against the Chief Constable and Lord Advocate can now proceed to a full evidential hearing.
"The Lord Advocate had argued that a victim of a malicious, wrongful prosecution had no absolutely no right to damages. Today’s judgement shows that is not the case.
"I will obviously be considering the full legal implications of the judgement closely with my legal team, but I look forward to continuing my fight for justice. "
Previously at the Court of Session in Edinburgh, the former administrators maintained the Lord Advocate initiated and pursued “a wrongful prosecution” and there was no evidential basis for the charges brought against them.
But Judge Lord Malcolm heard in May that the Crown was seeking to establish the legal principle of immunity against such proceedings.
Gerry Moynihan QC, for the Lord Advocate, previously argued there was authority from the Inner House of the Court of Session, where civil appeal judges sit, conferring immunity on the Lord Advocate and that Lord Malcolm was bound by that decision.
But Mr Moynihan said he accepted the previous legal authority did not apply to claims brought under the Human Rights Act.
Claims under article 8 and article 5, covering the right to liberty and security, over the detention of Mr Whitehouse and Mr Clark are now expected to proceed to an evidential hearing.
Mr Whitehouse's lawyers accused prosecutors of bringing criminal charges against Mr Whitehouse to "disguise" their lack of evidence against him and for “grossly exceeding their powers” and “going beyond errors of judgement”.
Heriot Currie QC told judge Lord Malcolm the “most serious charge” alleged Whitehouse was involved with Whyte in a plan to sell the Ibrox club to a Whyte “front man” at an “undervalued” price.
He said the ”conduct of the Crown was so egregious”, it fell outwith the bounds of this immunity.
He also argued that no “absolute immunity” existed in England for the Crown Prosecution Service.
Mr Whitehouse’s lawyers claimed that throughout the period of detention, there were no reasonable grounds to suspect that Mr Whitehouse had broken the law.
They argue that the actions of police and prosecutors have damaged his reputation of being a first-class financial professional and led to a £1.75m loss in earnings.
Last month, Police Scotland was ordered to pay £130,000 legal costs to Mr Whitehouse in connection with his damages claim.
The case revolved around the argument that Police Scotland’s justifications for pursuing Mr Whitehouse were ‘wrong and had to be fundamentally changed’.
Among the challenges contested in a summary decree, was a claim described as false by Mr Whitehouse that he had attempted to pervert the course of justice by lying in witness statements about his knowledge that Mr Whyte planned to sell off rights to three years of future season tickets to investment firm Ticketus in a bid to raise £24 million as part of his bid to buy Rangers from Sir David Murray.
Last year, Mr Whyte was cleared of taking over the club by fraud at the end of a seven-week trial at the High Court in Glasgow.
Mr Whitehouse and Mr Clark were appointed as Rangers administrators in February 2012 and four months later the club's business and assets were sold to a consortium led by Charles Green for £5.5m.
Fraud charges were previously dropped against Mr Whitehouse and Mr Clark, ex-chief executive Charles Green, solicitor Gary Withey, David Grier, senior partner at accountancy Duff and Phelps, as well as ex-Rangers director Imran Ahmad.
The latest development came two years after Duff and Phelps’ London legal firm Holman Fenwick Willan was awarded £500,000 costs after police and prosecutors were found by the High Court in London to have “abused state powers” by carrying out an illegal raid while investigating the takeover.
In the new judgement, Lord Malcolm writes: “The pursuer, and separately his former co administrator of Rangers Football Club are claiming damages from those said to be responsible to allegedly wrongful detentions, arrests and prosecutions.
“The claims are brought at common law and in terms of articles five and eight of the European Convention on Human Rights.
“The Lord Advocate’s submission that the article eight claim should be dismissed in advance of proof is rejected.
“However, his plea of absolute immunity in respect of the common law claims is upheld.
“It follows that the actions against him shall proceed in respect of only the ECHR claims.
“So far as Mr Whitehouse’s claim against the police is concerned, the court is not prepared to uphold his submission that it can be decided on the pleadings that he need not prove malicious conduct on their part.
“The result is that the pursuer’s claim against the Chief Constable, and the defences to it, shall proceed to a proof before answer.”
Police Scotland said: "As the civil case is ongoing, it would be inappropriate to comment."
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