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24 Jan 2018

Honesty is Not the Best Policy – The slow death of Acquisitive Crime’s Best Concept

There is no concept so simple and familiar to the proverbial passenger on the Clapham Omnibus that it can’t be rendered unintelligible by enough law. This applies even to one as fundamental as dishonesty. Everyone claims to know it when they encounter it. It was doubtless this consensus which placed dishonesty at the crux of English criminal law. Yet it now seems that this staple has been reassessed and found wanting. Sadly, dishonesty’s fall from grace has resulted in complex and potentially unfair legislation.

Whilst not unknown to the criminal lexicon beforehand, dishonesty truly joined it as part of the Theft Act 1968 (where it was included in preference to “fraudulently” as the mental element of theft and other acquisitive offences).[1] When the Fraud Act 2006 determined in sections 2-4 the three ways in which a fraud could be committed, dishonesty was integral to all. In the proving of an allegation of fraud in the criminal courts, proving the defendant’s dishonesty was a ubiquitous necessity.

For a legal concept so essential, it was striking that neither the Theft Act nor the Fraud Act deigned to define it. This vacuum was left by Parliament to the courts to fill. The courts duly did their best to provide a working definition of it beyond a pragmatic but ambiguous “you’ll know it when you see it” direction. Unfortunately, prolonged judicial scrutiny led to obfuscation. The Court of Appeal tottered between purely objective[2] and purely subjective[3] definitions. The matter was settled (at least in the medium term) in Ghosh[4], where the Court held that dishonesty meant both that the defendant fell below the standards of ‘ordinary decent people’ (objective) and that the defendant realised that he had done so (subjective). Gradually this Ghosh definition was subjected to criticism. Why? Principally because it allowed defence advocates to argue that their clients’ actions either didn’t fall below the standards of reasonable people or that, if they did, this was not apparent to the defendant.

One clear sign of the change in mood was the amendment to the definition of the cartel offence created by section 188 of the Enterprise Act 2002. The Competition and Markets Authority, having failed to successfully prosecute anyone who had contested their guilt under this offence, contended that this was because it was simply too difficult to prove. The re-drafted section ditches dishonesty in favour of a set of relatively complicated statutory defences. Whilst there was more than one reason for re-drafting this section, it is likely that the difficulties of proving dishonesty were a key factor. The remedy, it claimed, was to remove the need to prove dishonesty from the statutory definition and thereby make the CMA’s job that little bit easier.

Simultaneously, and despite its centrality to the Fraud Act 2006, dishonesty had become less popular by 2010. It did not feature in the Bribery Act 2010 offences aimed at individuals. The subject matter of the Act is precisely the kind of behaviour which dishonesty is normally associated with – acquisitive crime. Indeed, it may not be inaccurate to say that bribery inevitably brings “dishonesty” (or one of its cruder synonyms) to mind. If prosecuting such activities does not require proof of dishonesty, it is hard to think of an offence which would. Whilst previous anti-bribery legislation did not use dishonesty, this is probably because it dated from the early twentieth century, well before the concept’s rise to prominence in the 1960s and 1970s. It would surely have been better (and certainly simpler) to use dishonesty as the mens rea element for the substantive offences within the Act. Crucially, a dishonesty element would have been more easily understood by all concerned.

Fifty years post-Ghosh, the future of dishonesty is uncertain. Whilst it remains central to fraud offences, future legislation may well favour more technical and complex mens rea concepts such as those used in the Enterprise Act and the Bribery Act. It might be thought that dishonesty had a good run and that grief at its demotion could be dispensed with. Unfortunately for justice as a whole, this particular fatality is already having a degrading impact on our law. In particular, it has two corrosive effects.

First, the exclusion of dishonesty as a concept has inevitably resulted in the creation of more complicated offences. Clearly wanting to ensure that the mental element of the offences was not too far eroded, the government included in the Bribery Act a requirement that the defendant sought to procure breach of one of three “expectations” – impartiality, good faith or trust. The mechanism by which these “expectations” are to be applied is contained in three separate sections of the Act and has provoked acres of academic comment. Similarly, the new defences to the cartel offence in the Enterprise Act are technical, and are unlikely to be fully understood by any defendant. In short, the decline of dishonesty has resulted in significant complexification of the criminal law. Such a trend is both inherently undesirable and potentially unfair to defendants. The new defences will inevitably be harder to understand (both while trying to avoid criminal liability in business and in Court). Even more importantly, jurors may find the new law difficult to grapple with. The results have been that those who cannot afford to take legal advice may simply end up guessing what the law is and falling foul of it as a result.

Second, the trend towards more complex criminal law effectively takes power away from juries. Complex law contains many more terms which trial judges will have to define (or which have been defined within the legislation itself). It can be anticipated that directions on such offences will be lengthy, intricate and difficult for a jury to follow. For example, it is difficult to imagine any direction on the new cartel offence being as simple as the Ghosh test. In the final analysis jurors could be treated more like technicians than diverse individuals applying their own common sense.

However, the depressing trajectory of the post-dishonesty criminal law has been jolted (if not arrested) by the Supreme Court’s judgment in Ivey v Genting Casinos [2017] UKSC 67. Essentially, the Court did away with the second (subjective) limb of Ghosh, leaving a defendant’s honesty to be judged solely by whether their state of mind fell below the standards of ‘ordinary decent people’. The judgment is at pains to state that the test is still subjective in the sense that it is concerned with the defendant’s state of mind[5] but the new test is, on any view, significantly simpler.

Ivey, undoubtedly a positive development, makes it possible to argue for a return to the use of the concept of dishonesty. It can no longer be said that the test for dishonesty is over-complicated – therefore its natural simplicity should be all the more attractive to future draftsmen. Nevertheless, the current trend for closely defined and complex legislation allows governments to define defences much more narrowly (such as the reasonable “prevention procedures” defence contained in sections 46(3)-(4) of the Criminal Finances Act 2017). It is therefore to be doubted that dishonesty will be resurrected in new criminal statutes in the near future.

Overall, the decline of dishonesty is to be regretted. It has been replaced by unnecessarily complex legislation which makes even the Ghosh test seem simplicity itself. This is a symptom of a worrying attitude on the part of government and prosecuting agencies – that simplicity is less important than making an offence easy to prosecute. Perhaps we would do well to go back to Clapham, and see what guidance the perspectives found on its public transport network offer future authors of criminal law?

[1] Ivey (Appellant) v Genting Casinos [2017] UKSC 67, paragraph 43.

[2] Ibid.

[3] R v Gikes [1972] 3 All ER 280

[4] R v Ghosh [1982] QB 1053

[5] Paragraph 60 of the Judgment.

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