A FORMER Rangers administrator is pursuing criminal action against Police Scotland and an ex-Lord Advocate to address the “abuse of power” in the legal system.

David Whitehouse is seeking to change the way that prosecutors and police in Scotland act in investigating those suspected of criminal behaviour after winning a landmark case and compensation for his malicious prosecution. 

And he has strongly criticised James Wolffe QC, the current Lord Advocate, the nation's most senior law officer, over an apology sent to him which he said failed to spell out what he would do to ensure the "ultimate abuse of power" is never repeated again.

It comes as he and Paul Clark, former joint administrators of Rangers agreed a settlement estimated to be worth £20m after an agreement in their malicious prosecution case against the Lord Advocate and the Chief Constable was reached "extra-judicially".

READ MORE: Scotland's top law officer admits malicious prosecution over Rangers fraud case

Insolvency expert Mr Whitehouse and Mr Clark were subjected to detention and criminal proceedings with others in the wake of businessman Craig Whyte's purchase of Rangers from Sir David Murray for £1 in May 2011 and its subsequent sale before a judge dismissed the charges.


David Whitehouse (left) and Paul Clark (right)

The two men had been originally been suing Police Scotland and the Lord Advocate for a total of £14m in damages, alleging that they were subjected to wrongful detention, arrest and prosecution during police investigations in 2014 and 2015.

All seven charges against them, alleging conspiracy to defraud and attempting to pervert the course of justice, were later either withdrawn by the Crown or ruled irrelevant by the High Court.

Lawyers for the Lord Advocate have admitted that prosecutors acted unlawfully for a significant amount of time in the prosecution of the two men.

They admitted that the human rights of both Mr Whitehouse and Mr Clark - who were cleared of all wrongdoing - had been breached at times during the investigation.

The Court of Session heard that the businessmen's legal teams had been supplied with papers which show senior Crown Office lawyers speaking about the "need to nail the Duff & Phelps people".

Details of the scandal started emerging four years ago when the Herald revealed that London-based legal firm Holman Fenwick Willan, who were acting for Duff and Phelps, 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 and seizing privileged documents in connection with the failed Rangers fraud case.

Mr Whitehouse has now told the Herald on Sunday that the money is not enough and that he is determined that "something good" comes out of his ordeal by pursuing change within Scotland's justice system.

"Compensation might serve my interests. But it doesn't serve the interests of the justice system in Scotland," he said.

READ MORE: Crown pays over £80k to ex-Rangers administrator David Whitehouse over "wrongful" restraint order

"It doesn't protect others from the same horrendous conduct which I faced."

He is now taking legal action to secure the release of documents disclosed in his damages case with a view to seek prosecutions of individuals within Police Scotland and the Crown Office over their unlawful pursuit of both him and Mr Clark. Those he is pursuing include then Lord Advocate Frank Mulholland QC.

Mr Whitehouse said: "If you don't address the abuse of power, if you don't address the conduct of those who are engaged in process, then the future costs will just magnify.

"They have to address, own up to and face up to the scandalous conduct for which they were responsible.

"They are not owning up to it and addressing it by simply buying it off.

"I have had what has been presented as an apology from the Lord Advocate which in essence says that he unreservedly apologises, that I should not have been prosecuted and that lessons have been learnt and steps taken to ensure this doesn't happen again.

"What steps? What I have asked him to do is spell out what steps.

"Because I cannot see any evidence of anything having changed. Nobody has been disciplined, nobody has been sacked, nobody has been prosecuted.

"No marker is being laid down in over egregious, unlawful conduct as far as I can see.

"I am seeking leave to use material recovered through the civil case to make a criminal complaint in relation to conduct.

"This will enable us to make complaints and make reports of criminality in relation to Crown staff, the former Lord Advocate and police officers. And to enable me to give open evidence to a public inquiry.

"I have an enormous mountain of evidence and information which shouldn't be brushed under the carpet.

"If they want something good to come from this, they should address their shortcomings and put it right. Not just pretend it didn't happen."

The police investigation was launched against a backdrop of the controversial nature of Mr Whyte's nine-months in charge after his 2011 takeover.

He agreed to take on Rangers' financial obligations, which included an £18m bank debt, a potential £72m 'big tax case' bill, a £2.8m "small tax case" liability, £1.7m for stadium repairs, £5m for players and £5m in working capital.


But he controversially helped fund his takeover by setting up a loan in advance from London-based investment firm Ticketus against rights to three to four years of future club season ticket sales in a bid to raise £24 million and pay off bank debt as part of a share purchase agreement with Sir David Murray.

His reign as Rangers ended as the business went into administration and then liquidation in February, 2012, leaving thousands of unsecured creditors out of pocket, including more than 6000 loyal fans who bought £7.7m worth of debenture seats at Ibrox.

Creditors also ranged from corporate giants such as Coca-Cola to a picture framer in Bearsden and a lady called Susan Thomson who ran a face-painting business and was owed £40.

Four months later, the company's business and assets were sold to the Sevco consortium fronted by former Rangers chief executive Charles Green (below) for £5.5 million.


Mr Whyte ended up being the last man standing in the fraud conspiracy case and was acquitted of taking over the club by fraud at the end of a seven-week trial four years ago.

Mr Whitehouse also believes there should be a "full and transparent" public inquiry into the affair.

He has always believed that the arrests were made in the mistaken belief it would allow prosecutors and police access to sensitive and privileged documents that would provide the evidence they were looking for.

And in his fight he was always determined that the Lord Advocate could not be immune from a damages claim.

"The integrity of the justice system is an absolutely core pillar of any society, and they had scant regard for it," he said.

"It is completely outrageous that events such as this is deemed to be addressed by way of compensation. "The money isn't the important thing. I want something good to come from this and I want lessons to be genuinely learnt."

He said he had offered "absolute support" in terms of helping identify wrong-doing and wrong-doers and "helping them to try and address failings and identify weaknesses", but had no response.

READ MORE: 'Shameful episode' - Lord Advocate admits malicious prosecution of ex-Rangers boss Charles Green

"If you put some of this in a Netflix film nobody would believe it," he said.

The result of Mr Whitehouse and Mr Clark's legal pursuit to clear their names has meant that the Lord Advocate no longer has absolute immunity from being pursued in the civil courts for malicious prosecution. It marks a momentous change in an area of the law that has remained largely untouched for almost sixty years.

The current Lord Advocate has since admitted that the Crown, under then Lord Advocate Frank Mulholland QC acted unlawfully during a substantial part of the Rangers case proceedings.

The Court of Session previously heard evidence from Mr Clark's lawyer, Iain Ferguson QC, that he knew meetings were chaired by the then Mr Mulholland in which "strategic" decisions were taken about the case.

He said no minutes of these meetings appeared to exist. This means he was unable to discover what was discussed.

Mr Whitehouse says one of the big issues was that the Crown appeared still to be positioning itself to say that it was "a big mistake".

"If it was a mistake, then they would not be liable for damages in this case," he said. "The law protects them from mistakes.

"And the law should protect them from mistakes. This wasn't a mistake. It was a deliberate, wilful attempt to prosecute people in the knowledge that there was no evidential basis to do so.


"It was the ultimate abuse of power.

"So what I have asked the Lord Advocate to do is to address this so that people understand the circumstances.

"And I want to know in these circumstances why this is not a crime. Why is that not misconduct in public office."

He said it was not in the public interest to have the Lord Advocate pursued for a mistake.

"Our application is that they should only be liable when two legs of fact are proved to exist. One is that there is no evidential basis for a prosecution and second is their conduct was malicious.

"That would not be covered by a mistake. A mistake is not malicious.

"And in saying it is malicious, they need to take steps to address that and the only way to address that is to deal with those responsible. Not promote them.

"I told the Lord Advocate that I believe an apology only has value to me insofar as it sets out publicly the nature of the wrongdoing and gives an undertaking that it is being addressed and put right and what those steps are.

"What I have is a mealy mouthed, 'lessons have been learnt and steps have been taken' response. But what does that mean?"

Adam Tomkins the convenor of the Holyrood's justice committee has raised questions about the hit to the taxpayer from the settlement with the Lord Advocate and the justice secretary Humza Yousaf.

But Mr Whitehouse said: "I don't think they are focussing on the right thing. They shouldn't focus on the quantum, but why did it happen, and what is being done to stop it happening again."

The Lord Advocate also accepted that the two men's rights under Article Five of the European Convention on Human Rights had been violated during the prosecution.

The violation referred to how they were detained in custody following their arrest in advance for their first appearance in court.

Article Five of the ECHR relates to the right to liberty and security.

Two years ago, five judges headed by the Lord President, Lord Carloway, overruled rule stating that the Lord Advocate held an absolute immunity which was laid down in a 1961 case of Hester v MacDonald and agreed Mr Whitehouse and Mr Clark had pled a relevant case for proof against the Lord Advocate, in addition to cases against the Chief Constable of Police Scotland.


The ruling states: “It is a rule of the law of Scotland, founded on the public interest, that the Lord Advocate cannot be sued for damages in a civil action for any act done by him or on his behalf as public prosecutor.”

Crown experts say the idea behind the privilege is the belief that it would be detrimental to the public interest for the Lord Advocate to be fearful of the potential consequences of bringing a prosecution. It could lead to concerns about non-prosecution of cases.

But the Lord President said there was recognition that malicious acts of a judge in the course of his duties were actionable, and it was difficult to see why the position of a prosecutor, including the Lord Advocate, would be considered differently.

"In essence, in relation to his acts, the Lord Advocate, and those for whom he is responsible, are generally subject to the same rights and duties as other public officials in the conduct of their public duties", he stated.

READ MORE: Lawyers for former Rangers administrators pursue damages claim over 'unlawful' warrant in fraud case raid

Mr Whitehouse and Mr Clark were detained by police in dawn raids on their homes in November 2014, on suspicion of being involved in a "fraudulent scheme and attempt to pervert the course of justice".

They say this followed a police search of their office in which documents were taken over which legal privilege was claimed, and which had been reviewed by the police despite assurances that they had not.

On their detention they were taken from their homes in England and kept in police custody in Glasgow over a weekend, after which they appeared on petition and were granted bail.

It was alleged that by false pretences they had enabled Craig Whyte to gain control of Rangers and force it into administration, to their own financial benefit. Allegations that would be dropped.

In June, 2019 it emerged the Crown Office paid compensation estimated at £80,000 to Mr Whitehouse and his wife over the granting of a restraint order over his assets which Scotland's chief legal officer admitted at the time was "wrongful".

The Whitehouses had said that the granting of a restraint order in connection with the Rangers fraud case, which was eventually reversed, led to a loss in a particular investment opportunity, issues with making financial transactions and that they suffered a "loss of reputation, anxiety and distress".

A judgment by Lord Brodie over the release of papers involved in the case, revealed that the Lord Advocate admitted that actions in applying for the restraint order against the Whitehouses in December, 2015 were "wrongful in the respect of a failure to discharge the duty of disclosure and candour". The Lord Advocate at the time was Lord Mulholland.

In a ruling, Lord Glennie said the Crown were responsible for "a clear and very serious breach of the duty of disclosure and candour" in getting the restraint order.

The Crown Office had claimed Mr Whitehouse had benefitted from the proceeds of crime having been paid personally £3.1m for the administration, and that he had had a share of the proceeds of MCR, a UK-based restructuring and turnaround firm which was bought over by Duff and Phelps, which had advised Mr Whyte on his controversial takeover.

A Crown Office spokesman said: "The civil action raised by David Whitehouse and related actions are not fully resolved and we will not comment on them in detail at this time.

"The Lord Advocate intends to make a statement to the Scottish Parliament when the actions raised by Mr Whitehouse and Mr Paul Clark are concluded.

READ MORE: Call for government review after judges say prosecutors "abused state power" over Rangers fraud case raid

"A number of ongoing related court actions will restrict the scope of this statement.

"However, the Lord Advocate is committed to supporting public understanding of these cases and will provide as much information as he properly can.

"The Justice Committee has written to the Lord Advocate on this subject and that correspondence will be responded to in due course."

A Police Scotland spokesman said: "We have reached an agreement to resolve this dispute and, as part of that agreement, will make no further comment."