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The judgement handed down on 29 April 2020 by the Court of Appeal in Booth and another v R  EWCA Crim 575 is likely to be welcome news for local authority prosecutors and their investigation teams.
In Booth, the central issue for the five-strong bench, which included the Lord Chief Justice, was the status of the Supreme Court decision in the civil case of Ivey v Genting Casinos (UK) (trading as Cockfords Club)  UKSC 67 regarding the test for dishonesty in criminal cases.
R v Ghosh  EWCA Crim 2
The 'Ghosh Test' provided a two-limb test, which required juries to consider:
- Whether the conduct complained of was dishonest by the lay objective standards of ordinary reasonable and honest people; (the "objective test") and, if yes,
- Whether the defendant must have realised that ordinary honest people would so regard his behaviour ("the subjective test").
For the defendant to be found guilty, the jury would have to satisfied beyond reasonable doubt that answer to both these questions is "yes".
In Ivey the Supreme Court held that the second limb of this Ghosh Test did "not correctly represent the law and that directions based upon it ought no longer be given by judges to juries".
The Court of Appeal in Booth held that while the direction of the Supreme Court in Ivey was strictly obiter, the Supreme Court had nonetheless advanced an alternative to the Gosh Test and directed that it is this alternative test rather than the otherwise binding Ghosh decision of Court of Appeal which should be followed. As such, in Booth the Court of Appeal held that it was bound to follow the Supreme Court's direction and the correct approach to establishing a defendant's dishonesty was the application of a new two-stage test:-
- What was the defendant's actual state of knowledge or belief as to the facts? (subjective)
- Was the defendant's conduct dishonest by the standards of ordinary, decent people? (objective)
The second limb of the test was itself devised on Lord Hoffman's test in the 2005 civil case of Barlow Clowes International Ltd v Eurotrust International Ltd  UKPC 37 in which he considered:
"Although a dishonest state of mind is a subjective mental state, the standard by which the law determines whether it is dishonest is objective. If by ordinary standards a defendant's mental state would be characterised as dishonest [by ordinary, decent people] it is irrelevant that the defendant judges by different standards…"
As summarised in the Supreme Court press release following its decision in Ivey, the principal objection to the Ghosh Test as previously elucidated by Lord Hoffman is 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. The law should not excuse those who make a mistake about contemporary standards of honesty, a purpose of the criminal law is to set acceptable standards of behaviour".
In dismissing the appeal in Booth, the court also identified a number of issues that will still need to be decided on a case-by-case basis following the reformulation of the test for dishonesty. As such, in a jury's assessment of the first limb of the new test, evidence of particular practices in the given circumstances will need to be considered and the extent to which such practices should or should not inform the jury's considerations of the second limb of the new test. This will be of particular importance in cases involving alleged dishonesty in complex financial matters and fraud.
The court considered the elements of the offence of conspiracy to defraud in Booth, which endorsed the approach of Hickinbottom J as he was then, in the crown court case of R v Evans and others  1 WLR. In this case, the judge considered that is not necessary to prove an intent to deceive or cause economic or financial loss to a victim. Rather, there must be a dishonest agreement that includes unlawfulness either as to the object of the agreement or the means by which it will be carried out, which results in injury or potential injury to the (potential) victim's proprietary right or interest.
The impact of the decisions in Ivey and now Booth cannot be understated. It will have a profound effect in the prosecution of 'dishonesty offences' where prosecutors have hitherto struggled to secure convictions based on the defendant's own personal perception of dishonesty.
Please contact Matt Marsh if you have any questions about this e-briefing.
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