A SOLICITOR "embellished" claims for legal aid in child welfare cases with false details of sex abuse to fraudulently obtain nearly £2 million, The Scotsman can reveal.
In Scotland's biggest-ever legal aid fraud, James Muir made false claims for public money in hundreds of child protection cases over seven years.
Mr Muir, who kept a low profile in the profession but was regarded as one of the country's most dedicated and experienced specialist child welfare lawyers, committed suicide after the police began investigating.
Details of the case have been kept secret for two years while the Scottish Government's civil recovery unit sought to reclaim the money from his estate.
Yesterday the Scottish Legal Aid Board (SLAB) announced that an agreement had been reached with Mr Muir's family that will see 1.8 million paid back to the public fund.
Last night politicians demanded answers over how such abuse could go undetected for so long.
SLAB claimed the "tragic case" was a one-off and insisted it had improved procedures for checking legal aid claims.
Mr Muir's wife Susan, believed to be a serving police officer, has sold the family's luxury home in Bothwell, Lanarkshire, to help pay back the money.
Mr Muir, 45, who ran his practice from his home, worked mainly as a custodian, or "safeguarder", for children and minors too young to manage their own affairs or represent themselves in court.
The Scotsman can reveal that from 1999 until 2005, he made false claims for legal aid in several hundred child welfare cases. At the outset, he was claiming an average of around 1,000 per case, but by the time he was caught, this had risen to 10,000. To justify the soaring claims, he "embellished" detailed application forms to the legal aid board with fabricated details of sex abuse. He even invented statements between social workers and police officers.
The fraud came to light after legal aid staff noticed his payments were steadily increasing.
Strathclyde Police obtained a warrant to search Mr Muir's home and office on 20 April, 2005. Later the same day his body was discovered on a railway line.
A source last night said: "Mr Muir had a niche market, being the only dedicated children's lawyer in the area. All the children existed in his claims, but he made up the grounds of referral from the Children's Reporter and they all, in effect, became sex abuse cases. This allowed him to embellish claims and increase the amount paid."
Another lawyer, who did not want to be named, added: "If this had been going on in the criminal court, people would have quickly suspected something was going on. But he was basically doing this work on his own and no-one asked questions.
"Everyone thought he was simply working and doing well for himself. When it came to light, I think the legal aid board was embarrassed and furious in equal measure."
Mr Muir was known to have taken on a large workload and on occasions carried out work he did not claim for.
Now, following a long and detailed investigation by the legal aid board and months of negotiations, it is understood that his widow has agreed to give back all 1.8m that her husband received in legal aid over the seven years.
Bill Aitken, the Conservatives' justice spokesman, said: "Little can be done to protect the legal aid fund from deliberate theft but the obvious question is: how was this allowed to go on so long without someone noticing?"
A spokesman for SLAB said steps had been taken to prevent such fraud going undetected for so long. The body's investigation unit had been beefed up with new staff, with closer attention now paid to claims from lawyers working in specialised areas.
Pauline McNeill, Labour's justice spokeswoman, said: "It's important that lessons are learned from this case."
LEGAL AID BILL COSTS TAXPAYERS MORE THAN 150 MILLION
SCOTLAND'S legal aid bill cost the public purse more than 150 million last year.
Criminal cases accounted for nearly two-thirds of the total, but the civil legal aid bill also rose, for the first time in three years. Last year's total legal aid bill was 2 per cent up on 2005 and brought spending to the second-highest ever level.
The figures were disclosed yesterday in the annual report of the Scottish Legal Aid Board. It coincided with new proposals from the board and the Scottish Government to change the way solicitors are paid for legal aid in summary - or less serious - cases.
Under the proposals, there will be a "substantial" increase in payments to lawyers in the early stages of a case, with lesser rises for cases going to trial. This is intended to save money overall, as the system is said to favour "not guilty" pleas that are later changed.
The 150 million cost to the taxpayer was made up of 106.6 million on criminal cases, 39 million on civil cases and 4.5 million on children's legal assistance and contempt of court cases.
Over the past five years, total spending has gone up by 11 per cent, or 15 million, mostly because of a 13.6 million rise in the cost of criminal legal aid.
Announcing his intention to introduce the legal aid changes next spring, Kenny MacAskill, the justice secretary, said: "These proposals aim to save time and expense, to avoid wasted effort and to reduce the demands made on victims and witnesses."
Legal aid winners
DONALD Findlay, QC, has topped the list for legal aid payments to advocates, for the second year in a row, receiving 358,400 last year.
The Glasgow-based law firm Ross Harper topped the solicitors' list, also for the second year in a row, at 1.732 million - and 11 other firms of solicitors were paid more than 1 million each. Top-earning solicitor advocate was Iain Paterson of Paterson Bell Solicitors, with 219,300.
Ten advocates each earned more than 200,000 in 2006-7. They are Donald Findlay QC (358,400), Ian Duguid QC (321,600), Edgar Prais QC (272,500), Mhairi Richards QC (269,800), Paul McBride QC (237,800), Gordon Jackson (228,500), Derek Ogg QC (213,300), Lorenzo Alonzi (213,100), Ronaldo Renucci (212,100) and Thomas Ross (208,600).