In a unanimous decision, the United Kingdom Supreme Court (‘UKSC’) has decided that in future criminal and civil cases the test for dishonesty should be that by the standards of ordinary decent people the person’s conduct was dishonest. Before this decision this objective test was that applied in civil actions, but the test applied in criminal cases had an additional requirement that the defendant had to appreciate that their action would be considered dishonest by the standards of ordinary decent people. The UKSC also decided that in future the same test should be applied in both civil actions and criminal prosecutions. Although a UK case, the Cayman Islands courts would consider the decision persuasive authority.

Case: Ivey (Appellant) v Genting Casinos (UK) Ltd t/a Crockfords (Respondent) [2017] UKSC 67

What happened here?

A casino in London did not pay a professional gambler his £7.7m ‘winnings’ at the game of Punto Banco because it considered he had cheated. Together with an associate he had used a technique called ‘edge sorting’ which identifies small differences in the edges of playing cards created during their manufacture. The professional gambler admitted that he had used this technique, but he believed that its use was honest. Both parties agreed that their contract for betting contained an implied term that neither of them will cheat. The professional gambler argued that cheating necessarily involved dishonesty: in assessing whether he had breached the implied term of the contract and cheated the court should apply the same test as that for the statutory criminal offence of cheating at gambling, one element of which was dishonesty. He brought a civil claim against the casino for non-payment of his ‘winnings’.

What is dishonesty?

In civil actions the objective test of dishonesty which is applied is whether by the standards of ordinary decent people the person’s conduct was dishonest. However, for a jury to decide whether a defendant was guilty of a criminal offence which required proof of an element of dishonesty they had to apply first the objective test, and then apply an additional subjective test, introduced by the case of R v Ghosh [1982] QB1053.

What is the R v Ghosh test?

Step 1: A jury has to ask whether in its judgment the defendant’s conduct was dishonest by the lay objective standards of ordinary reasonable and honest people. If the answer is no, that disposes of the case in favour of the defendant.

Step 2: If the answer is yes, the jury had to ask itself whether the defendant must have realised that ordinary honest people would regard the behaviour in question as dishonest.Only if the answer to that second question is yes could the defendant be convicted.

So which test applied here?

Without actually defining cheating, the UKSC identified its essential elements. Cheating normally involves a deliberate act designed to gain an advantage in the play which is objectively improper given the parameters and rules of the game in question. Punto Banco is a game of pure chance. In asking the croupier to rotate certain cards and keep the same shoe/deck the professional gambler and his associate tricked the croupier into thinking what she was being asked to do was irrelevant, when in fact the actions gave him an advantage. His actions were positive steps to fix the deck and therefore constituted cheating.

Did they need to apply the second step?

The UKSC also added that if it were the case that cheating at gambling required an additional legal element of dishonesty, it would be satisfied in this case. However it considered that there was no logical or principled basis for the meaning of dishonesty to differ according to whether it arose in a civil action or a criminal prosecution. The objective test of whether a person’s conduct was honest or dishonest by the standards of ordinary decent people was the correct standard to apply. The additional requirement from R v Ghosh means that the less a defendant’s standards conform to society’s expectations, the less likely they are to be held criminally responsible for their behaviour.

Why did it say the second step should no longer be applied?

The UKSC considered that the purpose of the criminal law is to set acceptable standards of behaviour and it should not excuse those who make a mistake about contemporary standards of honesty. Accordingly the second step of R v Ghosh should not be applied in future cases.

So what is the test to apply?

The fact-finding tribunal must ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts and then determine whether his conduct was honest or dishonest by 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.

Solomon Harris
We at Solomon Harris have many years of experience in all forms of dispute resolution including actions involving civil fraud and appeals. If you are would like further information on how we can help contact us at info@solomonharris.com .
Disclaimer
The information contained in this article is necessarily brief and general in nature and does not constitute legal advice. Appropriate legal or other professional advice should be sought for any specific matter.

 

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