“Reasonable and honest people” everywhere may take some interest in the fact that their views are from now on to be the only yardstick by which an act will be judged to be “honest” or “dishonest”. Previously the test for “dishonesty” laid down in R v Ghosh [1982] QB 1053 required the prosecution to prove (1) that the actions of the defendant were dishonest by the lay objective standards of ordinary, reasonable and honest people and (2) that the defendant must have realised that ordinary honest people would regard his behaviour as having fallen below those standards. In Ivey v Genting Casinos [2017] UKSC 67, the Supreme Court (hearing a civil case) did away with the second limb of the Ghosh test, thus making what the defendant thought about how others would regard his actions irrelevant. However technical this change may sound, it will have a powerful impact on the criminal law, both by simplifying the trial of many regularly prosecuted offences and moving towards a more objective test in trials for many acquisitive offences.

The facts in Ivey revolve around an extremely sophisticated and painstakingly executed ploy used by Mr Ivey to increase the odds of his winning bets made at an exclusive London casino. The essence of his strategy was to persuade a casino employee to distribute cards in such a way that he could see a particular edge of the cards before they were dealt. Through infinitesimal differences in the decorative pattern printed on the back of the card (which was the result of how they were produced by the manufacturer) he was able to determine what the number on the front of the card was likely to be. It probably didn’t help Mr Ivey that he explained his request for cards to be arranged in a certain way by claiming he was superstitious and relied on the tolerance casinos extend to such beliefs. As a result of this strategy, Mr Ivey won around £7.7 million in a single night.

When the casino refused to pay Mr Ivey his winnings, Mr Ivey launched a civil claim and thus the matter came before the courts. The question was whether Mr Ivey had “cheated” within the meaning of section 42 of The Gambling Act 2005 (which creates a criminal offence of cheating). If so, then Mr Ivey would have breached the implied term of the contract between himself and the casino, and so have forfeited his winnings. If not, there was no breach of contract and the money was his. Mr Ivey argued that “cheating” necessarily involved dishonesty, and that since he had not acted dishonestly according to the second limb of the Ghosh test, he had not cheated.

Their lordships ruled that the second limb of the Ghosh did not represent the true position in law, and upheld the view of the lower courts that Mr Ivey’s actions had amounted to cheating. The Court ruled that the second limb of the test was unnecessary and meant that the more “warped” [57] a defendant’s standards of honesty were, the more likely they were to be acquitted. To remedy this problem the Court imported the civil definition of dishonesty into English law (in effect abolishing the second limb of Ghosh). This also had the effect of ending the:

“unprincipled divergence between the test for dishonesty in criminal proceedings and the test of the same concept when it arises in the context of a civil action” [57]

The effect of this decision on the criminal law is profound. Wherever a defendant might previously have escaped conviction by reference to their own personal belief about what reasonable people thought, he or she now has no way out. A whole host of potential defences based on cultural differences, widely accepted practices or acting for the benefit of others have been rendered futile at a single stroke. The impact will be all the more intense because a wide range of frequently prosecuted acquisitive offences (including theft and all types of fraud under the Fraud Act 2006) are based on the concept of dishonesty. Moreover, especially in fraud trials, the meaning of dishonesty is often the only crucial question for determination, because the actual conduct of the accused will be agreed.

Ivey undoubtedly simplifies the law on dishonesty, making it easier for the public and lawyers to understand. Indeed, as the Court in Ivey noted, these were precisely the intentions of the Criminal Law Revision Committee report which proposed the use of the word “dishonestly” prior to the term’s entry into English law in the Theft Act 1968. Undoubtedly, a jury will find it easier to understand and apply the new test of dishonesty.

The new test also brings dishonesty into line with many other important concepts in English criminal law, by aligning the legal definition of a common English word more closely to its ordinary meaning. Whilst it seems that the first limb of Ghosh survives Ivey [74] (and therefore the terms will still be partially defined by the judge), it is quite clear that their Lordships regarded it as needing minimal clarification. It is in the words of the judgment “a simple, if occasionally imprecise, English word”. The Court displayed a similar attitude to elaboration in paragraph 37 of R v Golds [2016] UKSC 61 where it defined the word “substantially” in the context of the partial “loss of control” defence to murder. Taken together, these two cases seem to represent a deliberate drive towards simplification of key criminal law concepts.

Moreover, whilst Ivey is undoubtedly a seismic shift in the English law, the preference for a simple definition of dishonesty did not spring into existence in 2017. The Court cites R v Feely [1973] QB 530, in which the Court of Appeal enjoins judges not to interpret “dishonesty” save where required to do so by the Theft Act 1968.

It might also be thought that the Ghosh test was ripe for simplification because it represented something of an anomaly. Unusually in criminal law it hinged on the defendant’s subjective belief not about a physical fact (such as whether a person attacking them was armed), but rather their belief about the inevitably nebulous views the public might hold of the defendant’s own actions. Whilst, as with any test, it is easy to find examples of situations which fall clearly within or without this definition, many situations will not. In this regard, the new test will certainly be more in keeping with the wider criminal law landscape.

Overall, thereFore, the judgment in Ivey represents a significant streamlining of the law governing many acquisitive offences.

The price of simplicity is, of course, part of the subjectivity of the Ghosh test. However, their lordships were keen to point out that the test is still ultimately subjective. The judgment is clear that what is to be judged objectively is not the defendant’s actions but his subjective state of mind. Reaching back to Ghosh itself, their lordships cite the example of a foreigner failing to pay a bus fare because he believes that public transport is free in the UK. Such a person would, according to the judgment “inevitably escape conviction” because his subjective state of mind was not dishonest according to the objective standard of honesty. It would therefore be inaccurate to label the Ivey test for dishonesty as objective.

Whilst the long-term effects of Ivey remain to be seen, one area which may be particularly sensitive to its effects is white-collar crime. For various reasons, prosecutors in this field often find it hard to secure convictions in offences where dishonesty is an element of the offence. This was probably the reason that the offence prohibiting cartels was amended, so as not to require proof of dishonesty, and why offences under both the Bribery Act 2010 and the Criminal Finances Act 2017 eschew the concept entirely. It is possible that Ivey will encourage prosecutors to bring more cases in those offences that still require proof of dishonesty, in the hope that the new test will be easier to satisfy.

While the jury is still out on the effects of Ivey (as will many others be in years to come) – it will undoubtedly simplify the concept of dishonesty and has brought it more into line with other areas of the criminal law. It is to be hoped that the ease and public understanding craved by the Criminal Law Review Committee fifty or more years ago will be better achieved from this point on.

This article was originally posted here.