The claimant, a professional gambler, sued a casino for winnings which he had obtained by, broadly, persuading a croupier to rotate face-down cards, having deceived her that the request was innocuous (when in fact this greatly improved his chances of winning). Both the judge at first instance and the Court of Appeal found that he was not entitled to the winnings because he had cheated. The claimant was adamant that what he had done was "legitimate gamesmanship" (and the judge accepted that he was genuinely convinced that what he did was not cheating). The claimant appealed and the Supreme Court has now unanimously dismissed that appeal. In so doing, it has re-defined the criminal test for dishonesty.

In R v Ghosh [1982], the Court of Appeal (Criminal Division) set out a two stage test for dishonesty: (1) whether the conduct complained of was dishonest by the lay objective standards of ordinary reasonable and honest people. If yes, (2) whether the defendant must have realised that ordinary honest people would so regard his behaviour.

The Supreme Court noted that the principal objection to the second stage of this test is that the more warped the defendant's standards of honesty, the less likely that he will be found to have been dishonest. As Lord Hughes put it: "the defendant who thinks that stealing from a bookmaker is not dishonest is entitled to be acquitted. It is no answer to say that he will be convicted if he realised that ordinary honest people would think that stealing from a bookmaker is dishonest, for by definition he does not realise this".

For civil cases, the test for dishonesty was confirmed by the Privy Council in Barlow Clowes v Eurotrust [2005]: "If by ordinary standards, a defendant's mental state would be characterised as dishonest, it is irrelevant that the defendant judges by different standards". The Supreme Court held that there was no logical basis for the meaning of dishonesty (as opposed to the standard of proof) to differ depending on whether it arises in a civil or criminal case.

The Supreme Court therefore held that the second test in Ghosh is no longer correct law.

COMMENT: This change in the test potentially makes it easier to secure a criminal conviction for a dishonesty offence, because defendants can no longer rely on the defence that they genuinely believed they were not dishonest. That will be of interest to insurers who write policies which refer to (and perhaps exclude) conduct which is dishonest according to the criminal standard of dishonesty.