This week the House of Lords granted Ian Norris, retired former CEO of blue-chip manufacturing company Morgan Crucible, leave to appeal against an order for his extradition to the US to stand trial for alleged price-fixing and obstruction of justice. His is the first case to test new extradition arrangements in place between the UK and the US to reach the House of Lords.
The key point in Norris’ appeal is whether price-fixing conduct can be prosecuted in England and Wales using the old English common law offence of conspiracy to defraud. Price-fixing did not become a statutory criminal offence in England and Wales until the implementation of the Enterprise Act 2002 and all of Norris’ alleged price-fixing conduct predates this. The US authorities therefore recharacterised the US allegations of pricefixing as the English common law offence of conspiracy to defraud in order to meet the test of dual criminality, one of the fundamental principles of extradition law.
It is this argument that has evolved not just into a major point of law for US/UK extraditions, but also for the UK competition law regime. If it is deemed that the offence of conspiracy to defraud can indeed be applied to prosecute price-fixing conduct in England and Wales before its criminalisation by the Enterprise Act, then not only would this pave the way for additional future extraditions but the UK business community would also be exposed to potential retrospective domestic price-fixing prosecutions for conduct in a period when it had previously not been a crime. In short, the gravity of the case cannot be overstated.
In addition to the implications for English domestic law, Norris’ case has significant ramifications for the UK’s extradition arrangements with the US, where the appetite for prosecution of price-fixing conduct is far greater. If Norris were to be extradited to the US to stand trial for price-fixing, he would be the first foreign national worldwide to do so. For this reason Norris’ case is very much a test case for US prosecutors.
Evidence shows that during the formulation of the Enterprise Act 2002, the Government, the principal regulator, Parliament and the major legal commentators all understood that there was no existing criminal offence for price-fixing. However, earlier this year the High Court ruled that statements made by Parliament, regulators and legal commentators could not be taken into consideration and that price-fixing conduct could be captured by the long-standing law of conspiracy to defraud.
Central to the first ground of Norris’ petition to the House of Lords is whether the High Court erred in finding that the views of the Government, Parliament and the regulator were inadmissible as to whether price-fixing was an offence at the time, and in concluding that the law was sufficiently certain. Norris’ position is that if Parliament, the regulators and academics understood that price-fixing was not an offence in the UK between 1989-2000 – when the conduct was alleged to have taken place - then to allow him to be extradited to face criminal charges for this offence would be to breach his right to legal certainty enshrined in English common law and Article 7 of the ECHR.
The second ground in Norris’ petition is that the extradition requirement of dual criminality has not been met. There is no need to prove dishonesty for the pricefixing offence in the US because the offence is one of strict liability; unlike the UK, where dishonesty is a crucial element of the offence of conspiracy to defraud.
The US sought to overcome this obstacle by including in its request a statement by a US prosecutor that Norris, “in effect defrauded customers.” This uncorroborated statement, which will never be judicially tested, was sufficient for the High Court to find that dual criminality had been met. In the petition to the House of Lords, Norris argues that giving effect to an agreement to fix prices is not dishonest and has never been held to be so.
Three further points of law of public importance will be also be considered by the House of Lords, namely:
(1) whether obstruction of justice of a US investigation constitutes an extradition offence;
(2) whether in determining if extradition should be barred due to the passage of time the court is entitled to take into account (as the High Court did) the fact that the defendant has not provided details of his defence in circumstances where the requesting state has refused to disclose any of its evidence against the defendant; and
(3) whether the court can refuse extradition under Article 13 ECHR if the requesting state refuses to give disclosure of material relevant to the passage of time issue.
The case has potentially seismic ramifications for both UK competition law and future extradition requests to the UK from the US. A number of preceding cases have already ensured that the spotlight has been on the UK’s controversial new extradition arrangements with the US, which have drawn stinging criticism from politicians, business groups, the media and human rights organisations. The glare is about to get brighter.