LEGAL representatives for ex-Rangers administrators Duff and Phelps have raised "real concern" after being accused of being in contempt of court as they sue Scottish prosecutors for £25m in legal action over a malicious prosecutions scandal.

The multinational company based in New York, whose employees were wrongfully arrested during a Rangers fraud investigation, has lodged a misconduct in public office claim demanding compensation from the Crown Office for “reputational damage”.

Legal representatives for Duff and Phelps, said it was "worrying" that it was being accused of contempt of court over accessing documents it is seeking over its claim against Scotland's most senior law officer, the Lord Advocate, who is both the head of the prosecution service and the Scottish government's chief legal advisor.

The Lord Advocate has previously questioned the relevancy of the action by Duff and Phelps which comes after it was admitted their employees David Whitehouse and Paul Clark were maliciously prosecuted in their action taken against prosecutors and the police.

Both settled out of court with the Crown Office in December to the tune of around £26.6m including costs with the Crown admitting a malicious prosecution.

The new case means that the taxpayer faces a bill of over £120m for wrongful prosecutions by the Crown Office and Police Scotland in the failed fraud case.

Mr Whitehouse, Mr Clark and five others were subjected to detention and criminal proceedings in relation to fraud allegations in the wake of Craig Whyte's disastrous purchase of Rangers from Sir David Murray for £1 in May 2011 and its subsequent sale before a judge dismissed all charges.

The fraud case arose after the club under Mr Whyte went into administration nine months after he bought it, with debts soaring over £100m while the team ended up relegated to the bottom rung of the Scottish football pyramid.

Representatives for the Lord Advocate are opposing the general release of documents including those uncovered in damages actions by Mr Whitehouse and Mr Clark saying that Duff and Phelps need to be more specific in their claims in their case to ensure documents covered by legal privilege in the course of the failed criminal investigation are not released.

The Herald:

Mr Whitehouse and Mr Clark

Roddy Dunlop QC, Dean of the Faculty of Advocates, who is representing Duff and Phelps which believes it has lost significant earnings since their employees were wrongfully prosecuted expressed his worry about claims made by the Lord Advocates's representatives while seeking the release of vital documents.

"The concern that we have is not just the practical one of this is going to be far too expensive and unnecessarily torturous, it's the more worrying one which is that if there is some sort of piecemeal approach to this, and we subconsciously, accidentally, find ourselves relying on documentation that we've seen, but has not been the subject of unexpressed permission... then we find ourselves in a situation of potentially being an inadvertent breach.

"And that suggestion, that concern, cannot be said to be illusory given that in the answers to the present case, there is a suggestion made by the Crown that we've already breached it.

"Now, the fact that that is said, in written pleadings by the Crown, against legal representatives, is a matter of some concern. It is not pressed to its full extent, but it's there, it's there in writing and that's a matter of real concern to everyone on this side of the bar."

An 'iomega type" document release procedure had already been used to share documents between various damages actions related to the wrongful prosecutions in the collapsed Rangers fraud case and to allow Mr Whitehouse to lodge complaints to regulatory authorities.

And Mr Dunlop said it was for the court to sort the matter out.

He added: "We're not talking about taking a mass of documents and passing them to a different jurisdiction and a different set of lawyers and massively expanding the list of people that have seen them.

"The suggestion that one needs to preserve the integrity of the criminal investigations in this case when that integrity has not only been impeached but blown wide open both in the course of litigations and in the public eye simply carries no weight either."

Gerry Moynihan QC for the Lord Advocate said that the purpose of having written notes of arguments between both parties was to "meet the question of inadvertent contempt of court".

"I must say that it's a concern we all have to face dealing with this multitude of associated cases, trying to figure out in which action, one has seen a particular document," he said. "What I have tried to do by the note of argument is to suggest that there is a practical way around the Dean of Faculty and those instructing him [fearing] contempt of court in seeking permission to use particular documents. He admitted that if the principal of comprehensive disclosure applied to the Whitehouse action it also applies to the Duff and Phelps case.

But he said that until there were "specific averments" made in the Duff and Phelps case "it's difficult for me to be certain what the issues actually are and to release documents".

Five of the seven men charged in relation to Rangers fraud cases have been pursuing compensation complaints over either wrongful arrest or malicious prosecutions against either Police Scotland, the Crown Office or both with collective payouts and claims now standing at over £120m.

Apart from Mr Whitehouse and Mr Clarke, Charles Green, whose Sevco consortium took over the club in June, 2012, also won a £6.4m payout.

Cases involving Duff and Phelps adviser David Grier, and Mr Green’s associate Imran Ahmad, are still ongoing.

Mr Whitehouse earlier this year handed over a dossier making serious allegations against police officers and Crown officials described as an iomega minute and was key to a documents release in his case and a future criminal probe.

Lord Tyre is to make a decision over the documents release in due course.