There’s a haphazard beauty to the way a small number of unfortunate litigants’ names endure on lawyers’ lips long after they would otherwise have been forgotten.
In the criminal courts, 1982 was a bumper year for this phenomenon. There was Mr Newton, who, as the Criminal Appeal Reports put it, “buggered his wife”, and whose name is still uttered whenever an important factual dispute arises after a guilty plea. There was Mr Nye, whose spent convictions were mishandled during his trial for assaulting police. And in April of the same year, there was the dishonest surgeon Mr Ghosh.
Mr Ghosh (I’ll give him the confusing courtesy title “Mr” that he was presumably then entitled to as a surgeon…) put in claims for payments for operations he didn’t carry out, and his name became attached to the directions on dishonesty recommended by the court in his appeal: the two-limbed “Ghosh Test”. His appeal was unsuccessful so he had to pay the £1200 fine he’d been given. Fifteen years later, in 1997, he was convicted of sexually assaulting a patient and sentenced to three years in prison, reduced to two on appeal. But that’s another story. I wonder if he had any idea what a curious event it must have been for the lawyers and judges who found themselves dealing with the Mr Ghosh? I suppose his mind was probably on other things.
Type poker legend Phil Ivey’s name into google in thirty years time and “Ivey test” or “Ivey direction” is unlikely to be the first autocomplete suggestion. But after yesterday’s Supreme Court Judgment in Ivey v Genting Casinos  UKSC 67 (and as a once keen student of poker myself) I’m strangely excited by the prospect of this baby-faced genius becoming the new eponym for dishonesty directions in criminal cases in England & Wales.
So how has the law changed?
From 1982 until yesterday, judges had to direct juries according to the two-limbed Ghosh Test:
Did the defendant act dishonestly by the standards of ordinary and decent people?
Did the defendant himself realise that what he was doing was dishonest by the standards of ordinary and decent people?
Only if the jury answered “yes” to each of these questions could they convict. The second limb – the so-called “subjective” test – has always been considered a bit odd: why should a defendant be entitled to be acquitted merely because he wrongly believes his dishonest behaviour is acceptable? Or as Lord Hughes put it in Ivey [at 57]:
“It has the unintended effect that the more warped the defendant’s standards of honesty are, the less likely it is that he will be convicted of dishonest behaviour.”
The court in Ghosh gave the following example of why the second limb was needed. A man comes from a country where public transport is free, and on his first day here travels on a bus and gets off without paying. His actions are dishonest, but his mental state is not. “Dishonesty” in the Theft Act cannot have been intended to criminalise his behaviour.
The Court in Ivey agreed but decided there was no need for the over-reaching second limb. The first limb will suffice, because
“What is objectively judged is the standard of behaviour, given any known actual state of mind of the actor as to the facts.” [at 60] [my emphasis]
Ivey has therefore removed Ghosh’s second limb, and with it the discrepancy between the criminal and civil definitions of dishonesty.
Metaphysics of dishonesty
When philosophers try to precisely define everyday concepts they quickly find themselves mired in intractable paradoxes and inconsistencies. It is, to give a famous example, all but impossible to specify what makes something “the same thing” as another thing – The Ship of Theseus (or “Trigger’s broom” if Only Fools and Horses was your thing) is almost as much of a problem for us today as it was 2000 years ago.
So it’s fun to see how the courts deal with the problem of defining fundamentally vague concepts in circumstances where the definitions actually matter. I find it particularly satisfying when a word that’s sufficiently vague to have led someone on an expensive journey through the appeal courts is slightly ill-temperedly declared to be “a perfectly ordinary English word with a well-understood meaning”. Wittgenstein would approve.
But sometimes a little bit of metaphysical progress is made in the appeal courts, and I think that has happened here. Consider the following statement:
I do not believe my actions to be dishonest, but I recognise that other people would judge them to be so.
That statement would be uttered by the hypothetical defendant whose standards of honesty differ from the ordinary decent member of the public, and who realises it (and would not, therefore, be able to rely on the second limb of Ghosh).
The statement appears to make sense, but really it doesn’t. And the reason it doesn’t – and this is implicit in the Ivey judgment – is that *as a matter of fact and not just in law* whether something is “dishonest” depends on whether people in general would call it dishonest. If they would, then it is dishonest. There are no private definitions of dishonesty. Wittgenstein would approve of this too. Perhaps a collection of Supreme Court judgments covers all that can usefully be said about metaphysics.
But how is the criminal Ghosh test relevant to Phil Ivey’s civil claim?
The details of what Ivey and his friend did at Crockford’s casino a week after the 2012 London Olympics are set out in the first seven pages of the judgment. They are a joy to read, and I won’t rehearse them here.
At trial, Ivey was open about what he’d done, and he expressed his belief that it was not dishonest. And the judge, Mitting J, found as a fact that that belief was honestly held. But the relevant issue in the claim was whether the contract’s implied term not to “cheat” had been broken.
There is also a criminal offence of cheating at gambling (with which Ivey was not charged): s.42 of The Gambling Act. “Cheating” is not fully defined in the Act. Two questions arise:
(1) Does “cheat” in the implied term of Ivey’s contract with the casino mean the same as it does in s.42?
(2) Does s.42 require dishonesty, thereby incorporating the Ghosh test?
Mitting J found that the implied term was broken – i.e. that Ivey had cheated. But he said it was unnecessary to decide whether that meant that s.42 would have been made out.
In the Court of Appeal, two of the three judges upheld Mitting J’s decision that Ivey had cheated. Sharp LJ dissented. She took the view that both Question (1) and Question (2) above should be answered with “yes” – i.e. there could be no “cheating” in the implied term unless there was “cheating” according to the criminal offence in s.42; and that s.42 did indeed incorporate the Ghosh test. So because Ivey would be entitled to be acquitted under the second limb of Ghosh, she would therefore have allowed the appeal.
The argument put forward on Ivey’s behalf in the Supreme Court was that Sharp LJ was right. The Supreme Court unanimously disagreed. They agreed that “cheat” in the implied term means the same as it does in the s.42 offence (i.e. Question (1) should be answered “yes”). But they disagreed about Question 2. They found that cheating does not necessarily involve dishonesty. Lord Hughes gives an example at para 45:
“The runner who trips up one of his opponents is unquestionably cheating, but it is doubtful that such misbehaviour would ordinarily attract the epithet ‘dishonest’ “
In order to decide Ivey’s appeal they did not have to decide whether or not the Ghosh test was correct. So their observations about it are, strictly speaking, obiter. But they are no doubt “highly persuasive” enough to alter the criminal law.
Paragraph 74 of the judgment is the important bit for criminal lawyers:
“These several considerations provide convincing grounds for holding that the second leg of the test propounded in Ghosh does not correctly represent the law and that directions based upon it ought no longer to be given. The test of dishonesty is as set out by Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Tan and by Lord Hoffmann in Barlow Clowes: see para 62 above. When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest 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.”
I’m sure I’m not the only one to feel a superficial twinge of disappointment that Ivey didn’t get his £7.7m, but it’s some consolation to know that juries will no longer be given the confusing second limb of Ghosh.