Rangers administrators’ £14 million damages claims against Lord Advocate for ‘malicious prosecution’ to proceed to full hearing

A judge had dismissed the claim based on the common law delict of “malicious prosecution”, but held that there remained a case to answer in relation to the claims based on breaches of the European Convention on Human Rights (ECHR).

A five-judge bench in the Inner House of the Court of Session agreed with the Lord Ordinary’s decision on the human rights claim, and ruled that the Lord Advocate was not immune from suit and that therefore the whole of the pursuers’ case could proceed to a full hearing.

‘Unlawful detention’

The Lord President, Lord Carloway, sitting with the Lord Justice Clerk, Lady Dorrian, and Lady Paton, Lord Menzies and Lord Brodie heard that the pursuers David Whitehouse and his former Duff & Phelps colleague Paul Clark faced criminal proceedings following Craig Whyte’s takeover of the club from Sir David Murray in 2011 and its subsequent sale to Charles Green in 2012.

The pursers were detained on two occasions following dawn raids at their home in Cheshire and Surrey in November 2014 and September 2015 before being arrested and charged.

They was accused of being involved in a “fraudulent scheme” and “attempting to pervert the course of justice” and originally faced a total of seven charges before all the charges on the indictment against him were eventually dropped or dismissed.

Mr Whitehouse, counsel for whom was Roddy Dunlop QC, and Mr Clark, counsel for whom was Douglas Fairley QC, raised actions against the Chief Constable of Police Scotland the Lord Advocate, seeking payment by the defenders, jointly and severally or severally, of £9 million and £5 million respectively, by way of damages for alleged wrongful detention, arrest and prosecution based on common law fault.

The pursuers also claimed that their rights under articles 5 and 8 of the ECHR had been breached.

The pursuers averred that there was “no justification” for their detention, committal, prosecution or indictment, as the Lord Advocate never had a sufficient evidential basis for any of the charges directed against them.

The pleadings stated that their detentions were “unlawful” because they lacked “probable cause” and that the absence of reasonable grounds for suspicion demonstrated a degree of “recklessness” on the part of the Crown amounting to “malice”.

In terms of the article 5 claim, it was stated that the actings of the defenders were a “disproportionate interference” with the pursuers’ liberty.

The pursuers also claimed that their private lives under article 8 were interfered with by their detention and subsequent bail conditions, which interference was “neither necessary nor in accordance with the law”. 

As a result of the defender’s actions they were unable to practice as insolvency practitioners and suffered “financial and reputational loss”.

‘Absolute immunity’

However, the Crown claimed that the Lord Advocate, and all acting on his behalf, enjoyed “absolute immunity from civil suit at common law”, which was said to cover all acts done in the investigation, preparation and conduct of criminal proceedings.

The defender relied on the case of Hester v McDonald 1961 SC 370 as authority for his position, arguing that the principle of immunity was to ensure that prosecutors were able to act “independently and robustly”.

Removing immunity could have a “chilling effect” on prosecutorial decision-making in difficult cases, it was argued.

It was accepted that the article 5 case was not subject to the immunity defence and therefore should proceed to a proof before answer.

But while there was also no immunity in respect of the article 8 claim, it was argued that the “right to respect for private and family life” was not engaged.

It was submitted that if criminalisation of conduct was not a breach of article 8, then article 8 was not engaged; were it otherwise any acquitted person could make a claim for an infringement of his rights under article 8. 

The Lord Ordinary upheld that Crown’s plea of “absolute privilege” at common law, but rejected the submission that the article 8 claim should be dismissed.

The pursuers appealed against the Lord Ordinary’s decision, arguing that Hester v McDonald was “wrongly decided”.

It was submitted that even if it had been correctly decided at the time, it should now be overruled on the basis that there was “no good reason in modern practice to maintain absolute immunity from civil suit”.

There was no good public policy or public interest reason for the Lord Advocate to enjoy absolute immunity, and the fact that an immunity was long established was “not a sufficient reason for blessing it with eternal life”.

‘No immunity from civil suit’

Allowing the appeal, the judges agreed that the 1961 case was wrongly decided and should be overruled.

The Lord President’s opinion stated: “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.

“There is no immunity from suit. Privilege is not a defence to malicious prosecution.

“Where there is proof of malice and lack of probable cause in relation to the general acts of a public official, including the Lord Advocate and those for whom he is responsible, the matter is actionable. 

“The fact that a flood of actions is unlikely to occur appears to be the lesson learned from the many jurisdictions, both in Europe and in the Commonwealth, in which no, or a very limited, immunity exists.”

The court observed that even if the Hester v McDonald case, decided by three judges, was determined to be correctly decided it would have been overruled on the basis that public policy no longer supported its continued application.

The Lord Justice Clerk added: “I accept that it is in the interests of justice that prosecutors should be protected against the consequences of mistake, negligence, error of judgement and similar matters.

“However this does not require an immunity from suit which protects the prosecutor who acts maliciously and without probable cause.

“I do not consider that immunity from suit for malicious prosecution is necessary for the discharge of the Lord Advocate’s duties.”

The remaining three judges, Lady Paton, Lord Menzies and Lord Brodie, agreed that the common law case and human rights claim should proceed to a proof before answer.

In relation to the article 8 claim, Lady Paton noted that the circumstances involving Mr Whitehouse and Mr Clark were “exceptional, and (it is to be hoped) rare”.

She said: “If the pursuers prove their averments, it would appear that the authorities had no evidence of any alleged crime having been committed by either pursuer.

“The pursuers were nevertheless taken from England, driven to a police station in Scotland, charged, kept in custody for several days, placed on petition, and ultimately served with indictments. 

“On the basis that the pursuers succeed in proving those averments, together with their averments about the lack of any evidence against them, I consider that there is a stateable case that Article 8 was, in their case, engaged.”