Art and Dishonesty: The New Test

Posted on: August 12, 2020 by

When the worlds of Art and Crime collide consideration of the issue of ‘dishonesty’ is not likely to be far behind. Not only is it a crucial ingredient in theft it also permeates other offences such as fraud under the Fraud Act 2006, or Conspiracy to Defraud at common law, and the specific offence of dealing in ‘tainted’ cultural objects. It is therefore of some importance that the Court of Appeal has recently confirmed a significant shift in the way ‘dishonesty’ is defined in theft and possibly in criminal offences generally.

The Royal Courts of Justice in London where the Court of Appeal (Criminal Division) is headquartered.

The issues that arose in Barton & Booth v R [2020] EWCA Crim 575 centred around the conviction of defendants for defrauding elderly and vulnerable residents of a care home. The case was complex, involving multiple counts of theft and fraud over an extended period of time. It is of course in cases involving complex and multiple commercial transactions, of the kind that can arise in the art world, that the issue of ‘dishonesty’ may be central in determining guilt.

The way in which this change has come about is itself highly unusual. In Ivey v Genting Casinos [2017] UKSC 67 (Ivey) the Supreme Court was faced with a civil case arising out of a claim by a professional gambler for his winnings against a casino. The casino defended the claim on the basis that the claimant had cheated. The trial judge found that, although Mr Ivey genuinely believed that what he did was not cheating, it nevertheless was. The Supreme Court agreed and held that it was unnecessary to decide further whether it was also ‘dishonest’.

Notwithstanding, the court went on to consider the meaning of dishonesty in the Theft Act 1968 and concluded that the test used for the last thirty five years had been wrong. This had involved a twofold test: (1) was what was done dishonest according to the ordinary standards of reasonable and honest people? If so, (2) did the defendant realise that reasonable and honest people would regard what he did as dishonest? Both questions had to be answered affirmatively. In Ivey the Court held element (2) to be unnecessary. The test was now said to be: (1) what was the defendant’s actual state of knowledge or belief as to the facts?; and (2) was his conduct dishonest by the standards of ordinary decent people? It was no longer a requirement that the defendant must appreciate that what he had done, by those standards, was dishonest. This test, it was said, should be adopted henceforward by the courts.

Part of what makes this all so surprising is that there is no doubt whatsoever that everything said about ‘dishonesty’ by the Supreme Court was pure obiter dicta. Accordingly, when the trial judge in Barton directed the jury using the new Ivey test the inevitable result was an appeal based upon the claim that the former law, which was undoubtedly more generous to a defendant, had not been abolished by judicial fiat which appeared to ignore the usual requirements of stare decisis.

The importance of Barton is that the Court of Appeal has made clear that this is exactly what has happened. The doctrine of precedent was said to have been altered in Ivey and it was not for the Court of Appeal to conclude that it was beyond the power of the Supreme Court to act in this way. It is true that there is caselaw which supports a looser approach to precedent in criminal cases when adherence to precedent might adversely affect the defendant, but this was a case with the opposite effect. Of course, there is the pragmatic argument, especially with a recent decision, that if a unanimous Supreme Court has emphatically announced the approach it will take to an issue then an appeal on that same issue would be futile as a forgone conclusion.

The implications of these decisions will no doubt take some time to play out. Academic criticism of the second element of the earlier test tended to focus on the claim that it enabled a defendant to benefit from his own idiosyncratic and much lower standards of honesty. The decision in Barton certainly pushes the mental element towards a more objective approach which is less generous to a defendant, but does it go too far? Partly perhaps because of the unusual way in which the decision in Ivey came about, where the issue of ‘dishonesty’ was not fully argued because it was simply not squarely before the Court, it is not clear whether the new test for dishonesty does apply to every situation where that term is used.

The importance of the meaning of ‘dishonesty’ stems partly from the fact that in a complex fraud of the kind that can arise in the art world, for example with the involvement of multiple parties complicated by issues of title, the situation can easily give rise to consideration of offences such as false accounting under s.17 of the Theft Act 1968 or even handling stolen goods under s. 22. If it does apply generally, the biggest impact may turn out to be in relation to the common law offence of conspiracy to defraud. The broad ambit of that controversial offence criminalises conduct between two or more people that would not be criminal, or even tortious, if done by one of them. ‘Dishonesty’ is the essential mental element of the offence which has just become less burdensome to establish. This makes the offence even more attractive as a prosecutorial weapon, especially in cases involving complex commercial fraud.

The same could be said about the offence of dealing in ‘tainted’ cultural objects referred to at the outset. This offence originated in the Dealing in Cultural Objects (Offences) Act 2003. As we have noted earlier, this offence has been rarely used by law enforcement and prosecutors, and one of the reasons may very well have been the difficulty in proving dishonesty, a key ingredient of the offence. Now after Ivey – and after Barton – we may see things start to change…

Image credit: David Castor via Wikimedia Commons (public domain CC0)