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Gambling, dishonesty, and a change in the law6th November 2017 Business Crime
A recent judgement by the Supreme Court could have a significant effect on conviction rates for offences in which the concept of dishonesty plays a central role.
The case in question involved a claim by a professional poker player, Phil Ivey. Mr Ivey won £7.7 million in a 2012 game of punto banco in Crockfords Club, London. However, Genting Casinos UK (the owner of the club) refused to pay out, accusing the professional gambler of cheating. Mr Ivey claimed that he won fairly, and brought a claim to recover his winnings.
The claimant won using a technique known as edge sorting. This involved the claimant spotting small, unintentional differences in the patterns on the back of playing cards, and using this information to help him identify the cards he was most interested in. Mr Ivey believed that using this technique was legitimate gamesmanship.
In order for Mr Ivey's technique to be effective, it was necessary for him to persuade the croupier to rotate a proportion of the cards. He achieved this by claiming to be superstitious. The court was in no doubt that this amounted to interference in the way the game was played and so constituted cheating, and dismissed Mr Ivey's claim. Although this was a civil claim, the court's findings could have a major impact on criminal trials which require a finding of dishonesty. The court found that Mr Ivey's actions were dishonest regardless of his opinion to the contrary, and stated the same test should be applied to criminal matters.
The Ghosh Test
Previously, where dishonesty in a criminal trial was alleged, the court would instruct the jury to apply the Ghosh test. This test has two limbs. Firstly, the jury must decide whether the conduct in question was dishonest by the standards of ordinary, honest people. If this was the case, the jury would then consider whether the accused himself must have realised that ordinary, honest people would consider his behaviour to have been dishonest. Only when a positive finding for both limbs had been achieved could a defendant be said to have been dishonest.
Had Mr Ivey been involved in a criminal trial, his belief in the legitimacy of the technique utilised may in the past have been an effective defence. However, the Supreme Court's position is that applying this defence would mean that the less a defendant's standards conformed to society's expectations, the less likely they would be to be held criminally responsible. The court's findings show that this approach no longer represents the law, and there is no longer a requirement for defendants to realise that their actions were dishonest in order to be found guilty.
The New Position
In cases where dishonesty is alleged, the jury is now required to ascertain the actual state of the accused's knowledge or belief as to the facts, and whether this belief is genuinely held. When this has been established, the jury must then decide whether the behaviour was dishonest according to the standards of ordinary, decent people.
There is therefore a subjective element to this test, in the sense that the defendant's beliefs and opinions should be examined during the process of ascertaining the actual state of his knowledge. However, the crucial question is whether ordinary people, not the defendant, consider the relevant conduct to have been dishonest.
There are a number of reasons why the court may have reached its findings regarding dishonesty. A finding of guilt in the majority of crimes does not depend on the defendant's own opinion of his actions. Also, proving a defendant's subjective state of mind to the criminal standard can be difficult for a prosecutor. It is perhaps illuminating to consider the possibility that, previously, two defendants could commit the same crime, but one could be acquitted if he believed that ordinary people would not consider his behaviour to have been dishonest, whilst the other could be found guilty if he did not share this belief.
With the subjective element of the test for dishonesty now largely removed, a line of protection for defendants has disappeared. This may result in more prosecutions and more guilty verdicts for offences such as fraud, for which a finding of dishonesty is an essential element, as the defendant's personal opinion of his actions can no longer be used as a defence.
Mike Rainford, Partner in JMW's Business Crime team, has concerns regarding this new ruling. Mike says 'Whilst some cases involving dishonesty are no doubt straightforward, other cases, such as those involving complex financial matters, are not so easy to judge. In these cases, the defendant's own opinion as to his motivations and the routine nature of his actions in his particular industry are critically important. What is paramount, however, is the expert preparation of the defendant's case to establish, regardless of the change in the law, his honesty and therefore innocence."
The Business Crime team at JMW have extensive experience in all areas of fraud and other offences involving dishonesty, and can be contacted on 0345-872-6666 or by completing our online enquiry form and a member of the team will call you back as soon as possible.