He was educated at Loretto School, Musselburgh, East Lothian, and graduated BA (Hons) and LLM (Hons), Gonville & Caius College, Cambridge, before going to the University of Edinburgh. He was elected to the Faculty of Advocates in 1969 and in 1972 he lectured part-time in constitutional law at Heriot-Watt University for two years. In 1979 he was appointed Standing Junior Counsel for the Foreign and Commonwealth Office and became a Queen's Counsel in 1982.
Lord Advocate, Colin Boyd, who was chief prosecutor at the Lockerbie trial, reacted by saying: "It was Lord Fraser who, as Lord Advocate, initiated the Lockerbie prosecution. At no stage, then or since, has he conveyed any reservation about any aspect of the prosecution to those who worked on the case, or to anyone in the prosecution service." Mr Boyd has asked Lord Fraser to clarify his apparent attack on Gauci by issuing a public statement of explanation.
William Taylor QC, who defended Megrahi at the trial and the appeal, said Lord Fraser should never have presented Gauci as a crown witness: "A man who has a public office, who is prosecuting in the criminal courts in Scotland, has got a duty to put forward evidence based upon people he considers to be reliable. He was prepared to advance Gauci as a witness of truth in terms of identification and, if he had these misgivings about him, they should have surfaced at the time. The fact that he is coming out many years later after my former client has been in prison for nearly four and a half years is nothing short of disgraceful. Gauci's evidence was absolutely central to the conviction and for Peter Fraser not to realise that is scandalous," Taylor said.
Tam Dalyell, former Labour MP who played a crucial role in organising the trial at Camp Zeist in the Netherlands, described Lord Fraser's comments as an 'extraordinary development': "I think there is an obligation for the chairman and members of the Scottish Criminal Cases Review Commission to ask Lord Fraser to see them and testify under oath - it's that serious. Fraser should have said this at the time and, if not then, he was under a moral obligation to do so before the trial at Zeist. I think there will be all sorts of consequences," Dalyell declared.
From 1992 to 1995 he was Minister of State at the Scottish Office covering Home Affairs and Health. He was then Minister of State at the Department of Trade and Industry with a responsibility for export promotion and overseas investment with particular emphasis on the oil and gas industry. In 1996 he became Minister for Energy.
In May 2003 First Minister Jack McConnell announced a major public inquiry into the handling of the Scottish Parliament Building project, headed by Lord Fraser. The inquiry heard evidence from architects, civil servants, politicians and the building companies.
On the 20th December 2006 Lord Fraser was detained by police after they were called to Dundee Airport following reports of a disturbance on board an aircraft. The former Lord Advocate has been charged with disorderly conduct on an aircraft which landed at Dundee Airport. It was announced on 2nd February 2007 that the Crown Office had dropped these charges due to insufficient evidence that an offence had been committed.