The UK-US extradition debate: implications for sovereignty and trade

Mike Lynch, once a celebrated entrepreneur coined the ‘British Bill Gates,’ now faces up to 25 years in jail if found guilty of what prosecutors in the US describe as ‘one of the largest frauds ever prosecuted by the United States Department of Justice.’ His extradition to the US took place in May, following a four year battle before the English courts.

Lynch is the co-founder and former CEO of UK software group, Autonomy, which was taken over by US company, Hewlett-Packard, in 2011. In 2012, Hewlett-Packard wrote off nearly $9 billion related to the acquisition and accused Autonomy of deliberately inflating the value of the company. Mr Lynch owned a substantial number of Autonomy’s shares and is alleged to have benefited personally from the fraud.

The arguments on appeal against extradition centred on what is known as the ‘forum bar’. The forum bar was inserted into the Extradition Act 2003 in 2013 (as section 83A) and enables the courts to stop extraditions if it decides that a substantial measure of the alleged criminal activity took place in the UK, and it would be in the interests of justice for the extradition not to take place. The purpose of the forum bar is in part to prevent over-zealous extra-territorial prosecutions and to prevent extradition where cases can fairly and effectively be tried in the UK.

Forum bar

It has operated to successfully prevent extradition to the US in a handful of cases including Lauri Love and Stuart Scott.  There is no equivalent bar under the extradition law applicable in the US. If Mr Lynch was facing an extradition request to the UK from the US, he would not be able to challenge his removal on an argument premised on the appropriate forum for the trial to be heard.

In extradition practice, where crimes have a cross-border element to them, it is not uncommon for those accused to ask ‘why can’t I face trial here, instead of the US?’ There are obvious benefits to being prosecuted in the UK, particularly if, like Lynch, a person’s home and work lives is rooted here. US sentencing laws tend to be harsher than for a similar offence in the UK, particularly if convicted after trial rather than on a plea.

If it succeeds, a significant benefit of the forum bar is that the UK authorities may decide not to prosecute you. There is no requirement to bring criminal proceedings in the UK following a failed extradition request based on forum.

Lynch sought to argue that successful claims against him in UK civil proceedings demonstrated that enough of the conduct and harm occurred here. The High Court disagreed and found that whilst some of the harm related to the inflation of the share price occurred in the UK, most of it was felt in the US. Another nail in the coffin for Lynch’s challenge was the view of the SFO that the US was the most appropriate jurisdiction for any prosecution to take place.

Lynch also sought to argue that that the District Judge should have examined the prosecutor’s reasons and “decided for himself whether they were right or wrong”. Efforts to persuade the court to examine the SFO’s findings on jurisdiction were futile. Lewis LJ and Knowles J decided that the court was not required to form its own ‘belief’ and that Lynch’s arguments were variously described as “misconceived”, “unrealistic” and “hopeless”.  This confirmed the established view that English Courts defer to the decisions of independent prosecutors.