The Lord Chief Justice stated: “We would like to support the respondent`s argument that the test of dishonesty set out in Ivey remains a test of the defendant`s mental state – his knowledge or belief – to which the standards of decent ordinary people are applied. Accordingly, dishonesty is judged by reference to society`s norms rather than the defendant`s understanding of those norms. Following the UK High Court`s decision in Serious Fraud Office v. Barclays Plc & Another1, prosecutors are aware that they now face a heavier task when trying to establish corporate criminal liability. However, a recent clarification of the Dishonesty Act could lead prosecutors to prosecute more people for complex fraud cases. The recent case of R v. Barton and Booth [1] confirmed that the new test for criminal dishonesty is the one proposed in Ivey v. Genting Casinos. [2] This reversed the long-standing test in R. v.
Ghosh [3], which required the jury to declare the conduct in question dishonest according to reasonable and honest standards, and that the defendant realize that it was dishonest in order to establish criminal guilt. In Ivey, the Supreme Court found that this test had the unintended effect of excusing conduct that might have been objectively dishonest but was not considered from the “distorted” perspective of a defendant. [4] Therefore, a new criterion was proposed, which removes this subjective element from the criteria and has since been used in practice. It has now been upheld as law by the Court of Appeal in Booth. For 35 years, the treatment of dishonesty was governed by the 1982 decision of the Court of Appeal in R. v. Ghosh.2 In this case, the test for dishonesty was worded as follows: On April 29, 2020, the English Court of Appeal (Criminal Division) in R. v. Barton and Booth2 confirmed that the test of dishonesty should be judged on the basis of societal standards and not the respondent`s understanding of those standards. The Barton decision makes organizations and their officers or employees more vulnerable to conviction when charged with fraud and other offences related to dishonesty. The first question asked the Court to consider the status of the Supreme Court`s observations in Ivey, supra.
The Court concluded that “if the Supreme Court itself orders that an otherwise enforceable decision of the Court of Appeal be no longer followed and proposes an alternative test which, in its view, must be accepted, the Court of Appeal is obliged to follow an order of the Supreme Court, even if it is strictly incidental. To this limited extent, the usual rules of precedents (or stare decisis) have been modified. We note that this limited change is limited to cases where all the judges of the relevant appeal to the Supreme Court agree that this is the effect of the decision. Mr. Barton and Ms. Booth were convicted of various offences; The main ones, fraud and conspiracy to cheat, required that the element of dishonesty be present. In presiding over the jury, the trial judge used the test of dishonesty set out in Ivey. The convicted defendants appealed to the Court of Appeal that the trial court should have applied the test of dishonesty set out in Ghosh because “the analysis [of dishonesty] in Ivey was strictly incidental”12 and therefore not binding, so the Court of Appeal was obliged to follow Ghosh; and that, in any event, the test set out in Ghosh was the correct one and was preferable to the test set out in Ivey.13 The Court of Appeal held that the correct test of dishonesty was time-barred as in the Supreme Court`s obiter observations in Ivey v Genting Casinos (UK) (carrying on business as Crockfords).3 This means that the two-member dishonesty test established in R. v. Ghosh4 and used for more than thirty years is no longer valid.
After the subjective part of the Ghosh test, prosecutors had to prove that an accused was aware that his or her actions would be considered dishonest, which created the risk that a defendant could escape conviction if he distorted standards of honesty. In essence, the Ghosh test led to the unsatisfactory situation that, even if a person`s conduct was considered patently dishonest by reasonable standards under Part One, in Part Two, if that person genuinely believed that what he was doing was not dishonest with those objective standards, They are not in the law, dishonest. As stated in Ivey, “[Ghosh] has the unintended effect that the more the accused`s standards of honesty are distorted, the less likely he is to be convicted of dishonest conduct.” This unintended effect appears to have been the result of the desire “to give effect to the principle that dishonesty, and in particular criminal responsibility in this regard, must depend on the actual state of mind of the accused. In Ivey, the Supreme Court resolved this unsatisfactory state of affairs by upholding the Barlow Cloves test: “While a dishonest state of mind is a subjective state of mind, the standard by which the law determines whether it is dishonest is objective. If, by ordinary standards, a defendant`s mental state were to be characterized as dishonest, it does not matter whether the defendant judges by other standards. In Ivey, the Supreme Court also stated that “there is no logical or principled basis for meaning dishonesty. to distinguish between civil and criminal proceedings. Their views on this aspect were so strong that the Supreme Court commented: “It would be an affront to the law if [the meaning of dishonesty] differed according to the type of proceedings in which it occurred. If you would like to discuss any of the issues raised in this article with one of our lawyers, please contact us confidentially.
In Barton, therefore, the Court of Appeal held that the test of dishonesty in all criminal cases was that set out in Ivey. However, the Court of Appeal wanted to know that it did support the view that the test of dishonesty in Ivey was the correct test and that it was a test of the defendant`s mental state to which the standards of decent ordinary people apply. They stated, “This leads to dishonesty being judged by societal standards rather than the defendant`s understanding of those norms.” In this view, the Court of Appeal agreed with the Court in Barlow Clowes, where the Court held that “dishonesty . simply means not acting as an honest person would in the circumstances. This is an objective standard. Honesty has a connotation of subjectivity. Honesty. has a strong subjective element in that it is a description of a type of behaviour that is judged by what a person actually knew at the time.
However, these subjective characteristics of honesty do not mean that individuals are free to set their own standards of honesty in certain circumstances. The standard of what constitutes honest behavior is not subjective. Honesty is not an optional scale. On this basis, all the circumstances that lead a defendant to act as he did are part of the subjective state of mind and the finding of fact before the objective standard is applied. In terms of jurisprudence, both courts were wrong to allow legal training from obiter dicta, but the Supreme Court had essentially declared the statute amended, so the Court of Appeal had to conclude that Ivey had altered not only the test of dishonesty in criminal law, but also “the common law`s established approach to precedent.” explaining that their test must be followed.