The Supreme Court in Ivey v Genting Casinos (UK) Ltd t/a Crockfords [2017] UKSC 67 has determined that the Ghosh test for dishonesty is no longer good law. The case raises significant questions about the meaning of "cheating" at gambling. More importantly, the court has rewritten the test for dishonesty in civil cases. This will affect the test applied in professional disciplinary proceedings.

Facts

On 20 and 21 August 2012, Mr Ivey and his associate, Ms Sun, played Punto Banco at Crockfords. On the pretence of superstition, Ms Sun asked the croupier to turn the cards in a particular manner if she indicated they were “good” or “not good.” The croupier had no idea of the significance but this meant that the long edge of the “not good” cards was oriented differently to the long edge of the “good” cards. Mr Ivey requested the same cards were used repeatedly while he continued to play over two days. Mr Ivey could now identify high value cards on the basis of their orientation, sharply increasing his betting accuracy. This technique - which Mr Ivey openly admits to using – is called "edge sorting," and over two days he won £7.7m.

Crockfords refused to pay Mr Ivey his winnings because it said the game had been compromised. The High Court held that Mr Ivey’s use of edge sorting was cheating, a finding upheld by the Court of Appeal. The Supreme Court dismissed his appeal.

How is "dishonesty" assessed?

The court considered the tests for dishonesty in both criminal and civil cases.

In criminal cases, dishonesty is a jury concept and the test was significantly refined by R v Ghosh [1982] QB 1053 which introduced a two-stage assessment:

  1. Is the conduct complained of dishonest by the standards of ordinary, reasonable, and honest people; and
  2. If so, must the defendant have realised that ordinary, reasonable, and honest people would consider his behaviour dishonest?

The accused is only convicted if the answer to both questions is yes.

However, the Ghosh test has not been followed in civil cases, for which the test is set out in Barlow Clowes International Ltd v Eurotrust International Ltd [2006] 1 All ER 333, at paragraph 10:

"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, it is irrelevant that the defendant judges by different standards."

In Ivey, the Supreme Court could not see a logical or principled basis for distinguishing the meaning in civil actions and criminal prosecutions. The court had serious issues with the second leg of the Ghosh test. The principle objection was that the less the defendant's standards conform to what society in general expects, the less likely he is to be held criminally responsible. The court found that the universal test for dishonesty is as set out in Barlow Clowes. Lord Hughes states at paragraph 74:

"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.”

What Ivey means for professional disciplinary committees and tribunals

Despite the dissatisfaction expressed by Mostyn J in Kirschner v GDC [2015] All ER (D) 155, Ghosh stood as the test for dishonesty in professional disciplinary proceedings for 35 years. This was on the basis that, for a professional, a finding of dishonesty is particularly grave (akin to a criminal charge). It should not be arrived at unless he or she had realised that honest men would regard what was done as dishonest.

However, now that the Supreme Court has abolished the Ghosh test, tribunals will no longer have to assess the practitioner's state of mind when considering dishonesty. In turn, establishing dishonesty allegations may well be easier.