New law on shaky ground: the test for dishonesty in criminal law

London_Courts

Speed read: The Court of Appeal affirming the Ivey test as the new standard for dishonesty in criminal law has changed the substantive criteria for dishonest conduct. In doing so it has attempted to patch the weak foundation of the law. But it has also affected unforeseen changes, including to the offence of theft and the future of jury trials, the full impact of which is still unknown.

The recent case of R v Barton and Booth [1] affirmed that the new test for dishonesty in criminal law is that proposed in Ivey v Genting Casinos. [2] This overturned the long-standing test in R v Ghosh [3], which required juries to find the conduct in question dishonest by the standards of reasonable and honest people and that the defendant realised it was dishonest, in order to establish criminal culpability. The Supreme Court in Ivey found this test had the unintended consequence of excusing behaviour which might have objectively been dishonest but was not when viewed through a defendant’s ‘warped’ perspective. [4] Therefore, a new test removing this subjective element from the criteria was proposed and has been applied in practice since being strongly suggested. It has now been confirmed as law by the Court of Appeal in Booth.

The controversy in this development lies in its shaky foundation. It was not necessary in Ivey to consider the merits of the Ghosh test on the facts, but the court seized the opportunity they felt was rare to effectively change the law. [5] The rarity does not make the opportunity appropriate, however, as Ivey was a civil dispute between a professional gambler and a casino which refused to pay his winnings on accusations of cheating. The analysis of dishonesty was precipitated by the contractual dispute, which examined whether dishonesty was a legal element of cheating. The court concluded it was not necessary to consider dishonesty on defining cheating but an analysis of the law on dishonesty ensued regardless. Despite acknowledging it was ‘strictly obiter’, the Court of Appeal in Booth approved the test which followed. [6]

In terms of precedent it was incorrect for both courts to permit the formation of law from obiter dicta, but the Supreme Court had essentially declared the law changed so the Court of Appeal had to stretch to conclude that Ivey altered not only the criminal test for dishonesty but also the ‘established common law approach to precedent’ by declaring their test should be followed. [7] The Court of Appeal qualified this significant side-step by clarifying it can only occur when all Supreme Court judges agree the law should be changed by obiter statements. The significance of Booth is now clear: the Supreme Court had already made new law with the Ivey test and the lower courts were already using it, so the Court of Appeal arguably had to accept the jurisprudential patchwork. This interpretation has support and it has been said that the Court of Appeal had limited ability or motivation to diverge from Lord Hughes’ strong statements. [8]

There are several effects of this jurisprudence. First, an important point of law has changed without proper arguments having been presented to the court on the matter. Ivey did not involve submissions of criminal jurisprudence on dishonesty and it did not benefit from criminal facts to test legal submissions. It is axiomatic that courts make determinations based on the submissions before them, and particularly that case law being overturned is considered within its own jurisprudential context. Throughout the history of the Ivey dispute in the civil courts, neither Ghosh nor related cases were considered in detail. [9] The effect of Booth is to compound this absence: though a criminal case, the Court of Appeal did not hear detailed submissions on Ghosh because the appeal was on the status of Ivey rather than being another chance to decide as Ivey did. Crucially, the Court of Appeal’s decision means this chance is unlikely to occur again.

The substantive impact of the changed test will ripple to offences which are based on dishonesty. This is foreseeable, but perhaps less so is the upset to finely balanced offences. One such offence is theft. R v Hinks[10]changed the law to allow the appropriation component of theft to include gifts where the owner could be easily influenced or vulnerable, meaning a person could be convicted of theft where they had technically been given the property in question. The subjective dishonesty test has therefore been an important protection for defendants who were given property. [11] It sits firmly within the remit of the jury to decide on the facts of each case whether the defendant’s actions constituted dishonesty. But the theft offence has effectively now been widened, depending only on whether reasonable people would consider the conduct dishonest as opposed to the defendant’s perception of that standard. There is no longer space to consider consent or subjective perception, indirectly creating a stricter offence. It has been argued that this expansion of criminal liability in theft cases from Hinks and now Ivey is unfairly wide. [12] It can be argued further that this expansion is unfair because it took place without facts, submissions or reasoned decisions on the theft offence.

Beyond this there is a question about how much change the new test has affected. The first limb requires only that a defendant’s state of mind be established, which stops short of the Ghosh requirement to determine subjectively whether the defendant realised their state of mind was dishonest. In practice, however, the new construction may still allow discussion of the reasonableness of the belief through the objective limb ascertaining the defendant’s mental state. This could be utilised by defendants who acted in an environment which informed their morality, for example a trader working in line with practices accepted by the financial industry who therefore did not realise their dishonesty. It was recognised in Ivey itself that the distinction is not so stark between subjective and objective. One of the reasons for the subjective limb of the test was to capture the accused’s actual state of mind, but Lord Hughes said this could still be examined within an objective test because

“[w]hat is objectively judged is the standard of behaviour, given any known actual state of mind of the actor as to the facts”. [13]

This contradicts other parts of the judgment which establish the civil test, which the criminal is now modelled on, as having no subjective element. [14] This is perhaps an example of an inconsistency which could have been ironed out in full submissions on the law in a criminal case.

Importantly, the broader criminal justice system may be impacted by this decision. The subjective dishonesty test was fundamentally a jury issue: it lay entirely with the jury to determine the defendant’s perception of their own actions within social standards. A question arises about the future of juries in dishonesty cases with a move back to objectivity. The long-term impact of COVID-19 is unknown but the crisis has already stirred debate about the workability of full-size juries. The dishonesty test will be material to the evolution of juries, affecting a downturn in the significance of jury determinations in the question of dishonesty notwithstanding the backdoor to subjectivity. This debate is yet to conclude but certainly, the reach of this decision must not be underestimated.

Further, the irrational difference between criminal and civil definitions of dishonesty was one of the reasons cited by the Supreme Court for changing the test. On an ordinary meaning of the word ‘dishonesty’ this might be persuasive because it is used as an everyday word in both contexts, but this argument falls away when the different purposes of civil and criminal law are considered. Both have different functions, with civil law regulating relationships between private parties where criminal law identifies culpability for wrongdoing on behalf of the state. The public interest is entirely separate, as are the evidential standards and formats. The calls for unification of the meaning of dishonesty may be valid but they do not justify undermining criminal jurisprudence. The criminal law also spawns obligations which were undoubtedly not considered by the court in Ivey or Barton when comparing it to civil law. For example, a wider dishonesty net could produce more reports of suspicions of money laundering because the remit of criminal conduct is greater. It is a criminal offence for an obliged entity to not report such suspicion, and thus the tight web of criminal culpability is affected.

The criminal law on dishonesty and beyond has been left unstable. The path from Ghosh to Ivey took 35 years so the opportunity to re-examine the latter seems unlikely. There could be scope to pursue appeals on the impact of the test on an offence such as theft, which has been materially changed, but practical and financial limitations abound. It falls to wait for the full impact of Ivey and Barton to unfold.

 

[1] [2020] EWCA Crim 575

[2] [2017] UKSC 67 [105]

[3] [1982] 2 All ER 689

[4] Ivey (n2) [57], [58]

[5] Ibid [63]

[6] Barton (n1) [93]

[7] Ibid [102]

[8] DPP v Pattinson, [2017] EWHC 2820 (Admin) [16]

[9] Laird, Dishonesty: Ivey v Genting Casinos UK Ltd (t/a Crockfords Club) Case Comment, (2018), Crim. L.R. 5, 395-399, 397

[10] [2001] 2 A.C. 241

[11] Virgo, Cheating and Dishonesty, (2018) C.L.J. 77(1), 18-22, 22

[12] Ibid

[13] Ivey (n2) [60]

[14] Ibid [74]