Wednesday, December 13th, 2017
For the last thirty-five years, the test of what is held to be dishonest has been both a subjective and an objective one, arising from the case of (R v Ghosh (Deb Baran)  QB 1053).
The defendant Mr Ghosh, a Surgeon, was convicted of four offences under the Theft Act 1968. The defendant had been carrying out work in his capacity as a locum Doctor, and was convicted of making false claims for payment, relating to work that had in fact been carried out by others. Mr Ghosh appealed his conviction on the basis that he stated that the Judge should have directed the Jury in this matter that dishonesty was about the accused’s state of mind (a subjective test) rather than the jury’s point of view (an objective test). The Judge in this case had in fact told the Jury at trial that they should use their common sense to determine whether the defendant’s actions were in fact dishonest.
The Court of Appeal however dismissed the defendant’s appeal and upheld the conviction, but in doing so clarified that in future “a jury must first of all decide whether according to the ordinary standards of reasonable and honest people what was done was dishonest… If it was dishonest… then the jury must consider whether the defendant himself must have realised that what he was doing was by those standards dishonest.” Thus, creating the “Ghosh” test of dishonesty, and requiring juries to consider:
- Was the act one that an ordinary reasonable and honest person (normally considered to be the ubiquitous ‘ man on the Clapham omnibus’) would consider to be dishonest and if so:
- Must the accused have realised that what he was doing was, by those standards, dishonest
The Ghosh test had been applied for decades, until October 2017, when the Supreme Court heard the case of Ivey v Genting Casinos  UKSC 67, which has dramatically changed the definition of dishonesty, no longer requiring a defendant to appreciate that their actions were dishonest.
The case of Ivey involved civil proceedings, and the Court were concerned with the act of “edge sorting”, when deciding whether Phil Ivey should be entitled to casino winnings of some millions, or whether his actions which resulted in the win during a game of punto banco, were in fact dishonest, entitling the casino to withhold the funds. Ivey claimed that he did not believe his actions or edge sorting to be dishonest, however the casino considered this to be cheating. The Court held the actions to be dishonest and in doing so revisited the above test for dishonesty, laid down by the case of Ghosh.
Lord Hughes criticised the idea which has been relied upon for many years, that a person must realise that their actions are dishonest, stating “There is no reason why the law should excuse those who make a mistake about what contemporary standards of honesty are.”
To most, this is would seem but obvious, however before October 2017, the second limb within the Ghosh test for dishonesty allowed the accused to escape liability where a mistake had been made as to the contemporary standards of dishonesty. In every area of law, ignorance of the law is not a defence, – Ignorantia juris non excusa, the Latin legal phrase, yet for thirty-five years, the test within Ghosh, allowed for such mistake of the standards of dishonesty, to excuse a defendant when to the reasonable and honest person, their actions would be dishonest, if the Jury were convinced of their assertion. (For example, in Ivey it was accepted that he did not believe that he was cheating, however the Court held that what mattered was that in law, it was).
The case of Ivey corrects this, and will undoubtedly result in more successful convictions, especially within fraud cases where the test of dishonesty is critical.
Despite the fact that the decision in Ivey arose from civil proceedings, the Supreme Court held that the basis for the definition of dishonesty should not differ, whether in civil or criminal proceedings.
The new standard of dishonesty arising from Ivey is therefore as follows:
When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.’
The full judgement in the case of Ivey can be found as follows: https://www.supremecourt.uk/cases/docs/uksc-2016-0213-judgment.pdf.