In the balance: UK-US Extradition Treaty

Following the discharge of Julian Assange from a US extradition request at the beginning of this year, the UK-US Extradition Treaty remains firmly in the spotlight. This month has witnessed the extradition hearing of Autonomy co-founder Mike Lynch. The new US President has confirmed that the decision not to commence proceedings for the extradition of US citizen Anne Sacoolas (accused of killing Harry Dunn in a road accident in the UK in August 2019) is final. Even before an extradition request had been submitted for Ms Sacoolas, the Trump Administration were quoted as saying they were ‘very reluctant to allow its citizens to be tried abroad’. Boris Johnson in February 2020, in response to a question from Jeremy Corbyn as to whether the Prime Minister would commit to seeking an equal and balanced extradition relationship with the US responded by stating “I do think there are elements of the relationship that are imbalanced. I certainly think it’s worth looking at”. This response could not have come at a better time for Mr Lynch, who had just been arrested on the US extradition request. 12 months on, however, and little has been done to address that perceived imbalance.

Mr Lynch is one of the UK’s most prominent and successful businessmen, famously described as “Britain’s Bill Gates”. A British and Irish citizen who has lived in the UK his whole life, he is accused by the US Department of Justice of committing fraud (specifically wire fraud and securities fraud) relating to Hewlett Packard’s takeover of Autonomy PLC – a British company listed on the London Stock Exchange of which Mr Lynch was the co-founder and CEO. It is alleged that Autonomy’s value was artificially inflated before its sale to the Californian tech giant. Lynch is said to have mis-stated Autonomy’s revenues, resulting in Hewlett Packard claiming to have overpaid by $8.8 billion.

This allegation is not new; the conduct forming the substance of the US Department of Justice (‘DOJ’) indictment (which dates back as far as 2011) has already been investigated in the UK by the Serious Fraud Office (‘SFO’). They concluded as long ago as 2015 that there was insufficient evidence to provide a realistic prospect of conviction in relation to part of the conduct alleged and ceded jurisdiction to the DOJ on the rest. This latter decision may appear perverse given the alleged criminality took place in the UK, was perpetrated by a UK citizen and related to a UK headquartered and listed company. Controversially, the UK, unlike a number of other jurisdictions, has no discretion to refuse an extradition request based merely on the individual being a British citizen. This has led to many accusing the UK of “outsourcing” its justice system, particularly to the demands of over-zealous US prosecutors.

Logic dictates that if there is to be a trial of Mr Lynch, it should be in the UK. Indeed, Hewlett Packard, the complainant in the DOJ’s case, chose to bring civil fraud proceedings in London, in what is reportedly the UK’s largest ever civil trial. Importantly, judgment has yet to be handed down. David Davis MP – a long-time opponent of the US/UK Extradition Treaty – has criticised the decision of the DOJ to initiate extradition proceedings prior to the civil judgment as “extraordinarily inappropriate”. However, even if Mr Lynch were to defeat the civil case brought against him, it would not result in the withdrawal of the extradition request or the US criminal case being discharged for lack of evidence (controversially the UK-US Extradition Treaty does not impose on the US the requirement to demonstrate a prima facie evidential case), although such a decision may well lend weight to arguments Mr Lynch will undoubtedly raise before the extradition courts that he should be tried in the UK and not the US.

It would seem perverse if Hewlett Packard were unable to prove on a balance of probabilities in the High Court in London that fraud had been committed and yet at the same time our extradition courts in London allowed the DOJ to continue to pursue the case before a US criminal court on substantially the same facts (where they would have to persuade a jury beyond reasonable doubt).

Unlike Anne Sacoolas, Mr Lynch will not have the benefit of having the extradition proceedings halted through political intervention, with the UK Home Secretary now only having a strictly limited role to play in US extradition proceedings. The ministerial powers were removed in 2013, the last year in which they were exercised for the benefit of Gary McKinnon by the then Home Secretary Theresa May. Instead, it will be left to an extradition court alone to determine Mr Lynch’s fate.

Because Mr Lynch will be unable to challenge extradition on the basis that there is insufficient evidence to demonstrate a prima facie case, the focus of his defence is likely to be the protection of the forum bar. The forum bar, brought into force in 2013, was intended to provide real protection against the extra-territorial, over-zealous overreach of US (and other) prosecutors. Over many years prior to its introduction, cases had regularly surfaced where the US sought the extradition of British nationals accused of crimes where the alleged conduct was carried out wholly or substantially in the UK; the NatWest Three, Gary McKinnon, Richard O’Dwyer and Christopher Tappin to name just a few. For the first five years of its existence, the forum bar failed to bite, leaving many to opine (myself included) that it was toothless in its application and illusory in its effect.

That all changed in 2018 when the High Court allowed the appeal of Lauri Love against his extradition from the UK to the US. The Lord Chief Justice ruled that his extradition was barred by reason of forum in that it would not be in the interests of justice for him to be extradited. Those who predicted the case was a one-off due to its unique fact pattern (myself again included) did not have to wait long to be proven wrong. Later the same year, the forum bar came to the rescue of a British former HSBC trader, a decision that reportedly caused outrage in the Eastern District of New York. Since then, no doubt the US authorities have been seeking an opportunity to temper the emerging powers of the forum bar and will therefore be hoping that Mr Lynch’s case can turn the tide.

Given the erosion of the Secretary of State’s powers to intervene in US extradition cases, there will be many opponents of the UK-US Extradition Treaty who will be hoping that Mr Lynch resists extradition; a win under the forum bar would demonstrate to all that it is sufficiently robust to stand up to the continued overreach of US jurisdiction. The City will also be keeping a close eye on developments amid rising concern that UK centric conduct involving the fallout from business deals between US/UK companies could result in their senior executives being hauled into a criminal court in the US many years later, rather than the same matters being investigated by a less aggressive SFO and, if appropriate, prosecuted in the relative comfort of Southwark Crown Court.

Edward Grange, Partner