In the case of Scott v Government of the United States of America [2019] 1 W.L.R. 774, the High Court (Lord Burnett LCJ, Males J) exhibited an evolving (more sympathetic) judicial approach to US-UK extradition and found that the extradition should not take place in the interests of justice utilising the relatively novel “forum bar” submission.
The United States sought an order for Stuart Scott’s extradition to the US under section 70 of the Extradition Act 2003 in order for Mr Scott to stand trial in the American jurisdiction for alleged fraudulent FX trading and conspiracy to commit wire fraud. The senior court accepted submissions on the forum bar under section 83A(3) of the Extradition Act 2003 i.e. that extradition would not be in the interests of justice as the majority of the quantified harm occurred in the UK and Mr Scott had no material links to the requesting state whatsoever. The US subsequently abandoned its’ attempt to extradite the ex-HSBC currencies trader and the CPS Extradition Unit were not instructed to appeal the decision to the Supreme Court.
Why did the US pursue an extradition request?
The US government sought the extradition of Mr Scott under section 70 of the Extradition Act 2003 (given that the US is classified as a category 2 territory under the Act and consequently Part 2 of the 2003 Act applies). The Serious Fraud Office (SFO) found that there was insufficient evidence for a realistic prospect of convicting Mr Scott in the UK. Accordingly, the US sought extradition in order for Mr Scott to stand trial in the US in connection with alleged fraudulent FX trading and wire fraud connected with manipulation of the US markets which carries a maximum sentence of 30 years imprisonment.
The USA’s extradition request alleged that whilst Mr Scott was employed as a banker by HSBC in London, he participated in a scheme to defraud a British oil and gas exploration company, Cairn Energy plc. The US’s argument was that there was a fiduciary relationship between HSBC and Cairn and as a result, HSBC (and Mr Scott) was obliged to act in Cairn’s best interests. However, it was alleged that Mr Scott devised a scheme to benefit HSBC by using insider knowledge to front-run the transaction to maximise the benefit for HSBC (in breach of the fiduciary duty owed to Cairn Energy plc).
Why did the court of first instance support extradition to the USA?
The Home Secretary had ordered Mr Scott’s extradition following the judgment of District Judge Snow at the Central London Magistrates’ Court. DJ Snow rejected Mr Scott’s submissions appealing against extradition, in particular:
- Abuse of process/dual criminality: although it is open to an individual to challenge extradition on the grounds that his conduct had not been fairly or accurately described in the extradition request, the court re-iterated the approach in Zakrzewski v District Court in Torun, Poland [2013] 1 WLR 324 that “the true facts required to correct the error or omission must be clear and beyond legitimate dispute”. This requirement was not satisfied on the facts of the case.
- Conduct “in” the US: the test for determining whether the relevant conduct substantially took place in a jurisdiction is found in Office of the King’s Prosecutor, Brussels v Cando Armas [2006] 2 AC 1 and R (Bermingham) v Director of the Serious Fraud Office [2007] QB 727. The respective tests were satisfied because: (i) parts of the alleged fraudulent trading occured in HSBC’s New York office; and (ii) harm caused by market manipulation included harm to US financial markets (and other trading companies in New York).
- Article 8 right to respect for private and family life: extradition was not incompatible with Mr Scott’s and his family’s rights under Article 8 “despite their sad personal circumstances.” Article 8 arguments failed on the facts of this case, but the key to a successful Art 8 submission is to follow the judicial approach in Norris v Government of the United States of America (No 2) [2010] 2 AC 487; H (H) v Deputy Prosecutor of the Italian Republic, Genoa (Official Solicitor intervening) [2013] 1 AC 338 and Polish Judicial Authority v Celinski (Practice Note) [2016] 1 WLR 551.
What is the “forum bar” to prevent an extradition?
The forum bar was added as section 83A of the Extradition Act 2003 by the Crime and Courts Act 2013. Interestingly, the legislative change was likely brought about by Theresa May’s refusal to extradite Scottish cyber-hacker Gary McKinnon to the US in 2012.
Section 83A(2) of the Extradition Act provides that extradition to certain requesting states (which includes the US) is barred if the place where most of the harm caused by the extradition offence is in the UK.
The forum bar is a novel ground for practitioners of extradition law and following Love v Government of the United States of America [2018] 1 WLR 2889 and the present successful quashing of the extradition order, is now a ground which the courts will take account alongside an accused’s connection to the UK.
On what grounds was the extradition order quashed?
The appeal succeeded as the court properly applied the forum bar in section 83A of the Extradition Act 2003, which provides that extradition of an individual to a category 2 territory (for example the US) is barred by reason of forum if the extradition is not in the interests of justice. The factors that the court takes into account when considering what is “in the interests of justice” include:
“(3) These are the specified matters relating to the interests of justice— (a) the place where most of the loss or harm resulting from the extradition offence occurred or was intended to occur; (b) the interests of any victims of the extradition offence; (c) any belief of a prosecutor that the United Kingdom, or a particular part of the United Kingdom, is not the most appropriate jurisdiction in which to prosecute D in respect of the conduct constituting the extradition offence; (d) were D to be prosecuted in a part of the United Kingdom for an offence that corresponds to the extradition offence, whether evidence necessary to prove the offence is or could be made available in the United Kingdom; (e) any delay that might result from proceeding in one jurisdiction rather than another; (f) the desirability and practicability of all prosecutions relating to the extradition offence taking place in one jurisdiction, having regard (in particular) to— (i) the jurisdictions in which witnesses, co-defendants and other suspects are located, and (ii) the practicability of the evidence of such person being given in the United Kingdom or in jurisdictions outside the United Kingdom; (g) D’s connections with the United Kingdom.”
Section 83A(3), Extradition Act 2003
The leading case on the forum bar is Love’s case [2018] 1 WLR 2889 (a judgment which was decided after the extradition hearing but before this appeal). Lauri Love is a student that the US Department of Justice accused of hacking US government websites. This was an appeal against the decision by Westminster Magistrates’ Court in September 2016 and represents the first significant case in which the forum bar was argued successfully to prevent an extradition. Applying the dicta alongside a close analysis of section 83A, the court found that “a substantial measure of the appellant’s activity was performed in the United Kingdom” which Love’s case is authority for the fact that this will usually be “a very weighty factor”.
Respectfully, it is submitted that DJ Snow did not accord arguments about where the most harm took place their due worth, and thankfully the High Court did correct this oversight by making clear that the harm was suffered by a British company in the UK. The US Department of Justice (in a business crime case) will likely cite market manipulation damaging the integrity of the United States financial markets as a factor supporting any request for extradition. Love’s case and now Scott’s case provide the UK courts with the higher judiciary authority to question the US’s attribution of where the greater harm is caused. In this case, although the transaction did involve the sale of US dollars (so that it was necessary for funds to be routed through the US market), this was in essence a technicality as the substance of the quantifiable harm caused to Cairn was in the UK.
Another factor considered “important” was Mr Scott’s connections to the UK. In a welcome clarification to section 83A forum bar cases (although the court accepted that there is no hierarchy in section 83A “interests of justice” factors) , the court did place weight on the appellant’s circumstances. In particular, that Mr Scott is:
- “a UK national with very strong connections to the UK”;
- “a British citizen, resident and domiciled here”;
- “the sole carer for his children who are also British citizens until he met his current wife, who was widowed with two children”; and
- facing “substantial personal pressures because of family illnesses”.
Most importantly, extradition would not be in the interests of justice given that he has no links to the UK, save for the fact that at the relevant time he worked for HSBC which was conducting business internationally.
As an aside, an important clarification was made by the Court of Appeal in Love’s case on the ambit of “connection”. “Connection” to the UK is not defined in the 2003 Act, and the Court of Appeal took a purposive interpretation (as opposed to the narrow definition accorded to it by the CPS) of the term by equating it to the definition of “ties” in bail decisions which covers “family ties, their nature and strength, employment and studies, property, duration and status of residence, and nationality”.
Are the Courts favouring greater protection for UK citizens in extradition requests from the United States?
It would be remiss to make a sweeping generalisation that UK courts are weighing the decision making process in favour of UK citizens. This is not how the court reviews the forum bar factors in section 83A. The court will weigh all the individual factors in section 83A to consider whether an extradition is in the interests of justice or not. Obviously the fact that the appellant was a UK citizen in this case was an important factor to consider in the judicial decision making process.
What is clear is that the court will review the individual factors and in particular that the court will not blindly accept a US submission that the US courts are the appropriate forum on the generalised grounds that US markets would have been affected by market manipulation. Of course, this factor is something that the courts will take into account in the extradition decision, however, this cannot be to the detriment of two other important factors, namely: (i) which jurisdiction most of the harm took place; and (ii) whether the appellant has a strong connection to the UK or not.
The Love and Scott cases will be helpful to practitioners as precedent decisions where the forum bar argument is successfully deployed, however, the floodgates have not opened (yet) and both cases demonstrate that only a particular combination of factors will result in a successful forum bar argument to prevent extradition. Nevertheless, the generally purposive judicial interpretation of section 83A of the Extradition Act 2003 is to be welcomed.
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