Nigel West reports on an important Supreme Court decision that has changed the test for dishonesty in disciplinary proceedings.

The most important case in 2017 on solicitor’s disciplinary law was probably the Supreme Court decision in Ivey v Genting Casinos [2017] UKSC 67. Ivey is widely recognised as a Supreme Court decision which has changed the test for dishonesty in disciplinary proceedings. 

The Ivey test for dishonesty

In Ivey, the Supreme Court set the following test for dishonesty: 

‘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.’ ([2017] UKSC 67 at paragraph 74) 

The importance of the respondent’s state of mind on the question whether his or her conduct was dishonest relate to a gambling dispute, and not a professional discipline case.

However, it is clear from the decision that the Ivey test should be applied to professional discipline cases, and that was confirmed by the High Court in November 2017 in GMC v Krishnan [2017] EWHC 2892 (admin).

The objective test

Many press reports have described the Ivey test as an objective test; the Supreme Court made two comments in Ivey which make it easy for prosecutors to argue that the test for dishonesty in disciplinary cases is now a purely objective test. 

To understand the context of those comments the reader needs to be familiar with the old test for dishonesty, because the comments were made in the context of rejecting the old test.

The old test for dishonesty, which was known as the ‘Twinsectra test’ or the ‘Ghosh test’, was a two-stage objective-subjective test.

The Tribunal had to first decide whether the solicitor had acted dishonestly by the ordinary standards of reasonable and honest people (a purely objective test) and, if so, the Tribunal then had to decide whether the solicitor was aware that by those standards he or she was acting dishonestly (a subjective test).

In Ivey, the Supreme Court made the following two comments on the Ghosh test:

  1.  ‘…..the second leg of the test propounded by Ghosh does not correctly represent the law and…directions based upon it ought no longer to be given…  there is no requirement that the defendant must appreciate that what he has done is….dishonest’ ([2017] UKSC 67 at paragraph 74)
  2. ‘Successive cases at the highest level have decided that the test for dishonesty is objective’ ([2017] UKSC at paragraph 62). 

Viewed in isolation those two comments suggest that the test for dishonesty is now a purely objective test, because the first leg of the Ghosh test was a purely objective test. 

In recent Tribunal proceedings, the Solicitors Regulation Authority has emphasised the objective element of the Ivey test, without taking account of the solicitor’s state of mind, by submitting: 

‘The …. test…. that the conduct alleged was dishonest by the ordinary standards of reasonable and honest people, is the test to be applied.’ 

In the GMC case of Krishnan the High Court had to decide whether the first stage of the Ghosh test (the purely objective test) was the same test as the Ivey test. His Honour Judge Sycamore, sitting as a High Court Judge said: 

‘I agree …..that the first stage (objective) Ghosh test is not the same as the second stage (objective) Ivey test. The objective test in Ghosh had to be applied without reference to the actual state of mind as to knowledge or belief as to facts of the individual concerned’. 

In short, although the Ivey test is objective, in the sense that the Tribunal must decide whether a solicitor was dishonest by applying the objective standards of ordinary decent people, that objective decision must be based on the solicitor’s state of mind at the time the conduct occurred.

It remains to be seen whether the Tribunal will in practice place a greater emphasis than the SRA on the need to first establish the solicitor’s actual state of mind. 

This case report appears in full in the January 2018 issue of the Legal Compliance Bulletin.