I have had no legal training, but on the plus side I have a high boredom threshold and I love reading – both of which are, I believe, essential for lawyers. This means that I can generally work my way doggedly through any piece of legislation. I remember that the first one to give me real pause for thought – and several lovely lawyers did try to explain it to me – was the Mareva injunction. (That’s a freezing injunction, for those of you too young to remember the original “Crackerjack”.) But my legal understanding has been rocked to its shaky foundations by a recent ruling by the (UK) Court of Appeal that for nearly four decades we have been using the wrong test to decide whether someone has acted dishonestly.
Dishonesty is one of those peculiar concepts: you feel that everyone should know what it means, and everyone probably does on an instinctive level – but courts cannot act on instinct and so a way has to be found to define what is almost too obvious to be defined. For years, I have been applying – in my AML capacity, and also as a magistrate here in the UK – what is cheerfully called the Ghosh test of honesty. It is named in honour of Dr Deb Baran Ghosh, a surgeon who defrauded the NHS. He appealed his guilty verdict in 1982 on the grounds that the trial judge had instructed the jury to use their common sense to determine whether Dr Ghosh’s conduct had been dishonest or not. His defence team argued that the judge should have instructed the jury that dishonesty was about the accused’s state of mind (a subjective test) rather than the jury’s point of view (an objective test). From this was derived the Ghosh test of dishonesty, which features what lawyers like to call two “limbs”:
- First you have to decide whether what the defendant did was dishonest according to the ordinary standards of reasonable and honest people (which is an objective test) – if not, that’s an end to it.
- But if the answer is yes, then you have to decide whether the defendant realised that reasonable and honest people would regard what he did as dishonest – so it’s not a matter of what he personally thought, but whether he realised what ordinary and reasonable people think.
(So if you organise a collection in the office to buy someone a wedding present and instead spend it on a slap-up lunch for yourself, the jury would be asked if ordinary people regarded that to be dishonest, and if so, did you know that ordinary people thought that way.)
Does your head hurt yet? Congratulations if you’ve just about grasped the Ghosh test… but it turns out that we’ve been doing it wrong for 38 years, because in R v Barton and Booth 2020, the Court of Appeal decided that the correct test of dishonesty is not Ghosh, but Ivey – specifically, Ivey v Genting Casinos (UK) 2017. And now we have a different pair of two limbs:
- First you have to decide what the defendant knew or genuinely believed the facts to be – which is a subjective test (never mind whether we would have thought the same – what did he believe the facts to be?).
- And then you have to consider whether, if ordinary decent people knew or believed those facts, would they consider what the defendant did was dishonest?
(So the greedy office collector might say that he thought his colleagues would be thrilled to see him having a lovely lunch rather than wasting the money on a fondue pot, and the jury would have to decide whether he really thought that.)
The key change seems to me – and again, I’ve had NO LEGAL TRAINING – to be that the defendant’s state of mind is the primary issue to be considered, rather than the attitudes/beliefs/prejudices/hopes/dreams of Ghosh’s “reasonable and honest people” or Ivey’s “ordinary decent people”. And what difference will this make? Well, I’ve spent the morning reading various papers written by barristers, law schools and other legal experts and they all agree: only time will tell. At least they’re honest.