CHAPTER 23 EXTRATERRITORIAL EFFECT OF U.S. LAWS: THE VIEW FROM THE OUTSIDE

• Jurisdiction: United States

International Resources Law: A Blueprint for Mineral Development
(Feb 1991)
CHAPTER 23
EXTRATERRITORIAL EFFECT OF U.S. LAWS: THE VIEW FROM THE OUTSIDE
William D. Park
Linklaters & Paines
London, England

INTERNATIONAL BAR ASSOCIATION SEMINAR

DENVER, COLORADO — FEBRUARY 1991

I believe it is right to say that, during the last 40 years, the principal battles on the subject of extra-territoriality have been between the United States and the United Kingdom (including its colonies). France has also been prominent. Henceforth I will talk of English law, because there is no such thing as UK law and all the matters I wish to refer to have concerned England. But a mention of Scotland. Do not think that extra-territoriality is a creature of the second half of this century. We have known about it for centuries; I would not claim we invented it, but there is an interesting example of it in the late sixteenth century when a Treaty between England and Scotland recognised the right of law officers on each side of the border to pursue criminals across the border with 'horse and (blood) hound'. As my family lived close to the English side of the border I am fascinated by its history and this particular right was known as 'the Hot Trod'. The law officers would apprehend the criminal and take him back for trial — and frequently did so, even if he was a national of the country in which they were guests.

But I mention this not only for historical interest; rather because it was the subject of a treaty. Almost all the problems of extra-territoriality which we encounter now could be avoided by treaties. I do not say this pompously, because I recognise that this would mean a significant increase in taxation to support an army of treaty makers, publishers, and commentators. What I do not is that this Anglo-Scots treaty conferred mutual rights and there was no divergence in jurisdictional concepts. In very large measure problems in regard to extra-territoriality arise because there is not a mutuality of concepts of jurisdiction or of the relevant substantive law.

As between the states of the USA and England, there is a major divergence in concepts of jurisdiction. We cling to the eighteenth century concept of having a place of business, or physical presence, at the institution

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of the suit in order to confer jurisdiction on the foreign court. You are forceful in talking in terms of 'doing business', which is interpreted as 'having effect'. For shorthand I will call it the 'effects doctrine'. I do not for one moment seek to defend our approach which I think is long out-of-date, is not followed by us when we take jurisdiction, and is doctrinally wrong. One thing which is clear to me is that a Scotland Border Riever, intent upon thieving cattle in my native Cumbria, did not have a place of business there, but was certainly having an effect. But our limited view is now enshrined in statute, and I am sorry to say that the excesses of litigation in the United States have ensured that it will remain so enshrined for some considerable time to come.

So how this does operate in practice in the last decade of the twentieth century?

As between the UK and the USA, we are deeply concerned about jury awards, treble damage suits, and anti-trust and RICO suits, and we hesitate to give recognition to judgements in them or to efforts to prosecute them if that involves UK citizens. Our principal response is the Protection of Trading Interests Act of 1980. We are deeply concerned about information gathering, whether it be in a civil action or a governmental inquiry. An unfortunate consequence is that our attitude toward jurisdiction, or rather...