David Davis has sharply criticised the US-UK extradition treaty in the wake of Mike Lynch’s recent acquittal in his American criminal trial. Lynch, who faced charges related to inflating the value of his company, Autonomy, during its sale to Hewlett-Packard (HP), was found not guilty after a three-month trial in San Francisco.
Lynch’s acquittal has intensified scrutiny of the 2003 treaty, designed to facilitate the extradition process for serious offenders. Davis termed the acquittal a ‘real clear demonstrator of how ridiculous’ the treaty is, asserting that it exerts a ‘chilling effect’ on British firms contemplating sales to American entities.
According to Davis, the American Department of Justice’s reach extends broadly, affecting any international sale involving a US company. He cautioned, ‘Any sale to an American company is plainly seen by the American Department of Justice to fall under American rules and regulations no matter where in the world it is.’ This raises concerns that British entrepreneurs may face protracted and biased legal challenges in the US long after their business transactions are concluded.
Davis cited the case of David Bermingham, one of the ‘NatWest Three’ who were extradited and imprisoned in the US, to underscore the potential for coerced plea bargains in the American legal system. He pointed out that approximately 97% of US federal cases are resolved through plea deals, a system that could pressure individuals into guilty pleas regardless of actual culpability.
Autonomy, founded by Lynch in 1996 to analyse unstructured data, was acquired by HP in 2011 for $11 billion. The transaction, however, soon became contentious as HP accused Lynch of financial misconduct, alleging he manipulated Autonomy’s value. Lynch has steadfastly denied these accusations.
Davis described the case as ‘daft,’ noting, ‘You have a sale of a British company on a British stock exchange, bought by a European subsidiary of Hewlett-Packard. They suddenly decide they’ve been defrauded after they sacked the chief executive who bought it. It was ridiculous.’
The business community has broadly welcomed Lynch’s acquittal. Brent Hoberman, founder of Lastminute.com, expressed his approval on social media, stating, ‘Great news for UK tech! Many UK tech founders looked up to Mike and will be happy to see him cleared.’ Similarly, Suranga Chandratillake, a partner at Balderton and former US CTO at Autonomy, commented, ‘Mike Lynch is a remarkable technologist and entrepreneur. If this verdict means he’s back in the UK and free to start working on tech again, rather than worrying about legal briefs, I think that’s a great outcome for British technology and UK plc.’
This case is the latest chapter in the ongoing fallout from HP’s acquisition of Autonomy. Sushovan Hussain, Autonomy’s former finance director, was sentenced to five years in the US for fraud in 2019, and Deloitte, Autonomy’s auditor, was fined £15 million in 2020 for misconduct. In 2022, Mr Justice Hildyard found Lynch had indeed defrauded HP in a UK civil trial but noted the acquisition might have proceeded even with adjusted financial figures due to Autonomy’s technological strength and customer base. Damages in this case are still pending.
Davis and Lynch have now pledged to work towards addressing the perceived flaws in the extradition treaty, reflecting broader discontent within the business community. Senior business figures, such as Sir John Rose and Lord Stevenson of Coddenham, had previously called for a halt to Lynch’s extradition, indicating substantial concern over the treaty’s implications.
The acquittal of Mike Lynch has catalysed considerable debate over the US-UK extradition treaty, with prominent voices such as David Davis advocating for its revision. The treaty’s impact on British entrepreneurs and businesses remains a contentious issue, underscoring the need for an equitable and transparent extradition process.
