In the seminal case of R v Ghosh [1982] Q.B. 1053, the Court of Appeal held that the test for dishonesty under the Theft Act 1968 had two limbs: (1) whether the relevant conduct was dishonest by the ordinary standards of reasonable and honest people (the objective limb) and, if so, (2) whether the defendant himself must have realised that what he was doing was by those standards dishonest (the subjective limb).
Over the course of the following 35 years, the Ghosh test has been applied in a variety of other contexts besides theft, wherever dishonesty is an element of the offence or cause of action. In criminal prosecutions, judges have habitually given juries Ghosh directions; numerous defendants have been acquitted because one or other of its limbs has not been made out.
Remarkably, last week the Supreme Court partially overruled the Ghosh test, in Ivey v Genting Casinos UK Ltd (t/a Crockfords Club) [2017] UKSC 67. This case was much publicised in the press in relation to its ruling on whether ‘edge-sorting’ constituted cheating. However, its legal importance stems from the conclusion that the subjective limb of the Ghosh test did not correctly represent the law, and jury directions based on it should no longer be given. The Court’s rationale for discarding the second limb was that the more warped the defendant’s own standards of honesty, the less likely he would be to appreciate that his conduct was dishonest by ordinary standards.
Instead, the Court held that where dishonesty was concerned, the first question should be subjective: was the actual state of the defendant’s knowledge or belief as to the facts dishonest? The second, objective question was then whether the relevant conduct was dishonest by the ordinary standards of reasonable and honest people (as per the first limb of the Ghosh test). As an element of a criminal charge, dishonesty was not a defined concept, or a matter of law, but a jury question of fact and standards.