By Stuart Alford QC, Daniel Smith and Clare Nida

The UK Supreme Court has unanimously ruled that the criminal dishonesty test in R v Ghosh is wrong and that courts should no longer follow this test. The recent decision in Ivey v Genting Casinos clarifies that the test for dishonesty in all proceedings (criminal and civil) is objective, and to be determined by reference to the standard of ordinary, decent people, without reference to whether the defendant realised that ordinary people would regard his or her conduct as dishonest.

The Facts: Ivey v Genting Casinos (UK) Ltd t/a Crockfords [2017] UKSC 67

The claimant, a professional gambler, used a technique called “edge sorting” during a game at the defendant’s casino, in which he and his associate represented to the dealer that he was superstitious, thereby persuading the dealer to turn the cards in a way which allowed the claimant to later identify those cards in later deals. The claimant won £7.7 million, but the defendant refused to pay out on the basis that the claimant was cheating.

Both the High Court and Court of Appeal found that the claimant had cheated, which was relevant because the claimant accepted that the parties’ betting contract contained an implied term that neither would cheat.

The claimant appealed to the Supreme Court, which considered the following issues:

  • The meaning of the concept of cheating in gambling
  • The relevance of this concept to dishonesty
  • The proper test for dishonesty, if dishonesty is an essential element of cheating

The Supreme Court Judgment

The Supreme Court dismissed the claimant’s appeal on the basis that cheating was sufficient to defeat his claim. The Supreme Court held that cheating does not require dishonesty, but considered the test for dishonesty regardless. The Ghosh test, used in criminal proceedings, follows a two-stage test:

  1. Whether the conduct complained of was dishonest by the objective standards of ordinary reasonable and honest people (the objective limb)
  2. Whether the defendant realised that ordinary people would regard his or her behaviours as dishonest by those standards (the subjective limb)

The Supreme Court recognised that the Ghosh test caused confusion by appearing to excuse defendants who were unaware of the ordinary standards of reasonable and honest people.

The Supreme Court confirmed in Ivey that Ghosh does not correctly represent the law, and that courts should no longer give directions based on Ghosh. The Supreme Court averred that the correct test for dishonesty 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 Ivey judgment puts an end to the subjective element of dishonesty in criminal cases, bringing the test into line with the civil law jurisdiction. Latham will continue to analyse key developments from this judgment, which has significant implications for future criminal cases.