Society reveals SOCA report in Hales/Thomson case

A report on Christopher Hales, former solicitor to the MP embroiled in a row over property dealings, was submitted to the Serious & Organised Crime Agency (SOCA) in 2011, the Law Society of Scotland has confirmed.

The disclosure added a new twist to a saga which has seen the Society come under severe pressure over alleged delays in reporting to Crown Office the transactions which led to Mr Hales being prosecuted before the Discipline Tribunal and eventually struck off as a solicitor in 2014.

At First Minister's Questions in the Scottish Parliament on Thursday, both Nicola Sturgeon and Scottish Labour leader Kezia Dugdale called on the Society to publish all documents relating to its investigation into the dealings connected to the company run by Michelle Thomson, who was elected for the SNP in May's general election but who has since resigned from the party. The Society resists this on the basis that it could jeopardise the ongoing police investigation.

Labour's public services spokesperson Jackie Baillie has written to Christine Grahame, convener of Holyrood's Justice Committee, calling for an inquiry into the Society's conduct in the case and whether it should "continue to act as both regulator and advocate for the legal profession". The committee will consider the letter at its next meeting on 27 October.

The Society previously stated that it “informally” notified the Crown about the case in December 2014 and April 2015, but did not make a formal report until July 2015, at which point a criminal investigation was instructed.

Ms Thomson has denied any wrongdoing. Mr Hales was prosecuted for failing to report to lenders on transactions that indicated a risk of mortgage fraud taking place. The transactions in question involved residential properties being resold at a substantially higher price very shortly after being acquired by Ms Thomson's company.

In its latest statement the Society said: “The Law Society has a legal duty to report suspicious activity and submitted a 'suspicious activity report' ('SAR') to SOCA in October 2011. This was following the original Law Society inspection of the firm which resulted in Christopher Hales being suspended, prosecuted before the independent Scottish Solicitors' Discipline Tribunal and struck off as a solicitor in 2014...

“Until the existence of the police investigation came into the public domain, the Law Society considered it could not disclose the fact that a SAR had been submitted. Police Scotland has since confirmed that it has been instructed by the Crown Office to carry out an investigation into the property transactions involving Christopher Hales. Given this is now a matter of public record and after receiving independent legal advice, the Society is able to confirm the submission of a report to SOCA in 2011 and believes the disclosure of this fact to be in the public interest.”

Commenting on the calls for publication of documents, the Society added: “We have sought to be as open as possible about our handling of this case, the steps taken that led to Mr Hales being struck off as a solicitor and our reporting to the relevant authorities.

“However, it would be irresponsible to release all of the files on this case as has been suggested. Not only would publication of this kind go against our data protection obligations but it could jeopardise the ongoing police investigation and potentially prejudice any legal proceedings which followed. We will of course give Police Scotland our full assistance.”

Neither Police Scotland nor the National Crime Agency, the successor to SOCA, has commented further.

Chief executive Lorna Jack has already promised a “thorough review” of the Society's processes to see what lessons can be learned, and that “We will also be meeting with the Crown Office to agree on how information can be more easily and effectively shared in the future.”

The Society initially reported to Crown Office when the possibility of mortgage fraud in the Hales case became apparent, but it is the Guarantee Fund Subcommittee that decides whether Discipline Tribunal findings should be formally reported, and the Society has accepted that there was a delay in the report reaching the committee due to staff workloads.