General

6KBW
6KBW
18 February 2018

Weekly Digest: 19 February 2018

This week’s Digest considers a decision of the Divisional Court quashing a conviction on the basis that the evidence on which the conviction was based should have been excluded by the magistrates under s. 78 PACE for being obtained in breach of Code C.

Miller v Director of Public Prosecutions [2018] EWHC 262 (Admin)

The judgment, available here, was handed down by Hickinbottom LJ on 15.02.18.

This issue in this appeal was whether the magistrates should have excluded evidence obtained in breach of PACE Code C; the Court held that the magistrates were wrong not to exclude the evidence, and accordingly quashed the appellant’s conviction. A preliminary issue arose as to whether the Court had jurisdiction to hear the appeal: it was contended that an interlocutory ruling of the magistrates’ court was binding and only challengeable by judicial review. The Court held it did have jurisdiction to hear the appeal.

 

Online courtrooms to pave way for digital justice

 

More victims of modern slavery may get leave to remain

  

Unaccredited labs dealing with digital forensic work

 

Judge refuses to withdraw Assange arrest warrant

 

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Paul Jarvis
Paul Jarvis
14 February 2018

Caparo revisited: Supreme Court clarifies scope of police duty of care

Last week, in a landmark judgment, the Supreme Court held that the police do not have blanket immunity from suit in respect of their conduct in investigating or preventing crime, but owe a duty of care to avoid causing foreseeable personal injury to others in accordance with the ordinary principles of negligence.

In July 2008, a relatively frail lady then aged 76 was knocked to the ground and injured by a group of three men who were struggling with each other.  Two of those men were sturdily built police officers.  The third was a suspected drug dealer.  The lady sued the police in the tort of negligence.  The Recorder held that the police officers had owed the lady a duty of care to prevent injury and they had acted in breach of that duty but they were immune from suit (following Hill v Chief Constable of West Yorkshire [1989] AC 53) because at the time of the breach they had been engaged in the apprehension of a suspected criminal.  The lady appealed the Recorder’s determination.

In February 2014, the Court of Appeal dismissed her appeal (Robinson v Chief Constable of West Yorkshire Police [2015] EWCA Civ 15; [2014] PIQR P14).  Delivering the judgment of that court, Hallett LJ considered that the three-stage test in Caparo (Caparo Industries plc v Dickman [1990] 2 AC 605, 617 – 618) “applies to all claims in the modern law of negligence” (para.40).  That ‘test’ was formulated by Lord Bridge in Caparo and requires (a) that the harm caused to the claimant must be reasonably foreseeable as a result of the defendant’s conduct, (b) that the parties must be in a relationship of proximity, and (c) that it must be fair, just and reasonable to impose a duty upon the defendant.  In consequence, Hallett LJ held that “[t]he court will only impose a duty where it considers it right to do so on the facts” (para.40).  In her judgment “most claims against the police in negligence for their acts and omissions in the course of investigating and suppressing crime and apprehending offenders will fail the third stage of the Caparo test” (para.46) and so it was in Mrs Robinson’s case.  It was not fair, just or reasonable to impose a duty on the police to an individual such as Mrs Robinson because the police owed a wider duty to the public to prevent and detect crime, and that wider duty was incompatible with the existence of a narrower duty to prevent harm to members of the public when acting in compliance with that wider duty.

Dissatisfied for a second time, Mrs Robinson appealed to the UK Supreme Court and for her it was a case of third time lucky (Robinson v Chief Constable of West Yorkshire Police [2018] UKSC 4).  The hearing of that appeal took place in July 2017 and judgment was handed down on 8 February 2018.  Lord Reed held that the Court of Appeal’s conclusion that the three-stage test in Caparo applies to all claims in the modern law of negligence “mistakes the whole point of Caparo, which was to repudiate the idea that there is a single test which can be applied in all cases in order to determine whether a duty of care exists” (para. 21).  Instead, the correct approach to determine whether a duty of care exists in any given case is to look to the established authorities and, in novel situations, to develop the law “incrementally and by analogy” with those authorities.

At common law, public authorities, like the police, are generally subject to the same liabilities in tort as private individuals and that means a police officer can be liable in tort to a person who is injured as a direct result of his acts or omissions.  Referring to Hill, Lord Reed said that the judgment of Lord Keith in the that case was not authority “for the proposition that the police enjoy a general immunity from suit in respect of anything done by them in the court of investigating or preventing crime” (para. 55).  On a true reading of Lord Keith’s judgment in Hill, as explained by Lord Toulson in the case of Michael v Chief Constable of South Wales Police [2015] UKSC 2; [2015] AC 1732 (para. 37), Lord Keith had simply meant that the general duty owed by the police to enforce the law does not automatically carry with it a private law duty to members of the public.  Whether the police are under a private law duty of care to protect members of the public from personal injury will depend upon the application of the ordinary principles of the law of tort (para. 68).  The sort of policy considerations that were considered by Lord Keith are “unnecessary when existing principles provide a clear basis for the decision, as in the present appeal” (para. 69(1)).

The application of the ordinary principles of the law of negligence was sufficient to place the police under a duty of care to protect an individual from a danger of injury which the police themselves had created, but such a duty was unlikely to exist where the danger of injury came from a third party and not the police, in the absence of special circumstances such as an assumption of responsibility by the police.  In Mrs Robinson’s case, it was reasonably foreseeable that the suspect would resist arrest and attempt to escape and that vulnerable pedestrians could be injured in the ensuing scuffle.  Accordingly, in the opinion of Lord Reed, the police had owed Mrs Robinson a duty of care which they had breached.  For those reasons he allowed the appeal. Lady Hale and Lord Hodge joined in his judgment. Lord Mance and Lord Hughes gave separate judgments concurring in the result of the appeal but expressing reservations about the ease by which the others had minimized the relevance of policy considerations to the issue of whether the courts should recognise the existence of a duty of care on the police towards private citizens in the exercise of their public law powers.

For some considerable time the decision in Hill had been interpreted as offering virtual immunity on public policy grounds to the police for harm caused to private individuals by the police in the course of fulfilling their wider duty to the public to detect and prevent crime.  The effect of Hill was often that under the third part of the Caparo test, the courts declined to find that the police owed a duty of care to private individuals in the position of Mrs Robinson.  Following Robinson, the position has shifted.  Whether the police owe a duty of care to a person in her position will depend not on the Caparo factors but on whether there is established authority that recognizes the existence of such a duty.  Where the facts are novel, the court should seek to draw an analogy with the existing case law where possible, and that may just enable public policy considerations to sneak back into the court’s decision-making process.  On the facts of Robinson, the recognition of a duty of care was straightforward enough but it is not hard to imagine other cases where the court’s task will not be so easy.  Hallett LJ in the Court of Appeal suggested that “the Hill principle” (para. 44) was designed to prevent defensive policing, that is to say the immunity that decision purported to confer on the police was meant to discourage the police from acting too cautiously by, for example, refraining from arresting suspected criminals in the streets in case that endangers the safety of pedestrians like Mrs Robinson.  Whether the erosion of the Hill principle in Robinson will result in a return to so-called defensive policing remains to be seen but as a re-statement of the orthodox principles underpinning the tort of negligence this judgment is welcome.

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6KBW
6KBW
12 February 2018

Weekly Digest: 12 February 2018

In this week’s Digest, we examine two recent Court of Appeal (Criminal Division) judgments. In the first, the Court of Appeal confirmed the scope of the availability of a writ of venire de novo. The second was an appeal under s. 31 under the Proceeds of Crime Act 2002, seeking reconsideration of the amount available under a compensation order.

R v. Bahbahani [2018] EWCA 95 (Crim)

The judgment, available here, was handed down by Lord Burnett of Maldon CJ on 05.02.18.

This was an application for leave to appeal against conviction and sentence. The applicant sought a writ of venire de novo in respect of a conviction in the Magistrates’ Court and contended the sentencing proceedings in the Crown Court were a nullity as they were an abuse of process. Leave was refused. A writ of venire de novo was not available in respect of summary proceedings in the Magistrates’ Court. Further, there was no abuse of process and the recorder had not erred in his application of the correct principles, under s. 10 of the Proceeds of Crime Act 2002, in the calculation of the benefit derived from the applicant’s criminal activity.

 

R v. Mundy [2018] EWCA 105 (Crim)

The judgment, available here, was handed down by Lord Justice Simon on 23.01.18.

This was the Crown’s appeal, under s. 31(1) of the Proceeds of Crime Act 2002 against a refusal of an application pursuant to s. 22 of the same act for reconsideration of the amount available under a compensation order. The appeal was dismissed; the course taken by the judge was properly open to him on the facts, even if his reasoning in reaching that conclusion could have been fuller.

 

R v. Jon Venables, Mr Justice Edis, Central Criminal Court, 7 February 2018

The full remarks are available here.

 

R v. Glen Gibbons, Mr Justice Bryan, Manchester Crown Court, 7 February 2018

The full remarks are available here.

 

Police wrongly pursued retired fire chief rather than investigate claim against fantasist

 

British group living in EU obtain preliminary reference

 

Self-harm amongst prisoners increases as prison healthcare funding is cut

 

Father to appeal against ruling allowing hospital to end son’s life support

 

 

 

 

 

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Karl Laird
Karl Laird
31 January 2018

Gross negligence manslaughter – an offence in flux 

After a period of relative stability following the seminal judgment of the House of Lords in Adomako [1995] AC 171, gross negligence manslaughter has been considered by the Court of Appeal on a number of occasions during the past 18 months.  In each of these judgments, the court has taken the opportunity to refine the elements of the offence.  This post will consider the four most significant judgments, with the aim of evaluating their impact upon the offence.

How should the jury be directed when assessing whether the defendant’s breach of duty was “grossly negligent”?

There are two relatively recent cases in which the Court of Appeal has considered how the jury should be directed when assessing whether the defendant’s breach of duty was grossly negligent.  In Sellu [2016] EWCA Crim 1716 the defendant was an experienced colorectal surgeon whose gross negligence was alleged to be the cause of the victim’s death. The trial judge directed the jury that their task was not just “to decide whether [the defendant] fell below the standard of a reasonably competent consultant colorectal surgeon, but whether he did so in a way that was gross or severe”.  The defendant was convicted and appealed on the basis that the judge misdirected the jury on the elements of the offence.  In allowing his appeal, the Court of Appeal held that it was incumbent upon the trial judge to assist the jury to identify the line that separates serious or even very serious errors, from conduct which was “truly exceptionally bad and was such a departure from that standard [of a reasonably competent doctor] that it consequently amounted to being criminal”. In the subsequent case of Bawa-Garba [2016] EWCA Crim 1841 the defendant’s conviction was upheld, as the Court of Appeal concluded that the trial judge had accurately brought to the jury’s attention the fact that the prosecution had to make them sure that the defendant’s conduct was “truly, exceptionally bad” before they could find her guilty of gross negligence manslaughter.

The Court of Appeal took the opportunity in Sellu to emphasise two additional points.  First, the trial judge must take steps to ensure that the medical experts do not usurp the function of the jury in determining whether the defendant is guilty.  Secondly, the court considered the issue of causation. The defendant’s gross negligence must cause the death of the victim and it was held that the jury must be directed to consider whether the defendant’s gross negligence occurred after the time that they could be sure that the victim would have survived. If the victim would have died even without the defendant’s gross negligence, then the defendant will not be guilty.

How should the jury assess whether the defendant’s breach of duty posed a serious and obvious risk of death? 

One of the elements of gross negligence manslaughter, as the Court of Appeal confirmed in Misra [2004] EWCA Crim 2375, is that the defendant cannot be convicted unless, at the time of his or her breach of duty, there was a serious and obvious risk of death.  This is an objective assessment and does not depend upon the defendant’s assessment of the risk.  The Court of Appeal has recently considered the question of whether the jury, in considering this element of the offence, are entitled to take into account what the defendant would have known but for his or her breach of duty.  This issue has been considered in two recent cases.  In Rudling [2016] EWCA Crim 741, it was accepted that the defendant GP could not have been aware of the grave nature of the victim’s condition unless she visited him in person.  In upholding the trial judge’s conclusion that there was no case for the defendant to answer, the Court of Appeal stated that “mere possibility that an assessment might reveal something life-threatening is not the same as an obvious risk of death. An obvious risk is a present risk which is clear and unambiguous, not one which might become apparent on further investigation”.  In the subsequent case of Rose [2017] EWCA Crim 1168, this issue was considered by the Court of Appeal more extensively.  The defendant was an optometrist who, during the course of a routine sight test, failed to conduct an internal examination of the victim’s eye, as she was required to do by statute.  Had she done so, she would have appreciated that the victim was suffering from a potentially fatal condition, which did, in fact, lead to his death a number of months later.  Had she conducted the examination in accordance with her statutory duty, the defendant would have appreciated the victim’s condition and referred him for urgent medical treatment.  The trial judge directed the jury that in considering whether the defendant’s breach of duty posed a serious and obvious risk of death, an optometrist who is so negligent that she does not even attempt an internal investigation cannot rely on that breach to escape liability for gross negligence manslaughter.  They could therefore take into consideration what the defendant would have known but for her breach of duty.  The Court of Appeal quashed the defendant’s conviction.  In a judgment delivered by Sir Brian Leveson P, it was held that the failure to examine the back of the victim’s eyes meant that there was the possibility that signs of a potentially life-threatening condition or abnormality might be missed, but his lordship concluded that this was insufficient to found a case of gross negligence manslaughter since there must be a “serious and obvious risk of death” at the time of the breach of duty.  The court concluded that in cases of gross negligence manslaughter, it is not appropriate to take into account what the defendant would have known but for his or her breach of duty.  The Court of Appeal declined to certify a point of law of general public importance.

Conclusion

Given the fact that gross negligence manslaughter appears to be in a state of flux, it is submitted that an authoritative judgment of the Supreme Court that evaluates the developments that have taken place since the judgment in Adomako would be welcome.  This would ensure there is clarity not just for those who are at risk of committing the offence, but also for the prosecutors who must decide whether to charge individuals with the offence.

Karl Laird is a Fixed-term Fellow and Tutor in Law at St Hilda’s College, Oxford and a future 6KBW pupil. 

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6KBW
6KBW
17 January 2018

No smoke without fire: revisiting the Crown exemption rule

When is the Crown bound by a statute that does not expressly refer to it? This was the question that arose for consideration by the Supreme Court in R (on the application of Black) v Secretary of State for Justice [2017] UKSC 81 (see the judgment here). 

The judgment

The appellant, a serving prisoner, sought judicial review of the Secretary of State’s refusal to provide prisoners at HMP Wymott with access to the NHS’s Smoke-free Compliance Line. This freephone telephone line is designed to enable anyone to draw breaches of the ban on smoking in enclosed public places and workplaces in England and Wales to the attention of enforcement authorities. The refusal to provide the appellant with access to the Compliance Line was made on the basis that Part 1 of the Health Act 2006 (which brought the ban into force) did not bind the Crown. The claim succeeded at first instance (before Singh J), but the Court of Appeal (Lord Dyson, McCombe LJ and Richards LJ) allowed the Secretary of State’s appeal.

In a unanimous judgment, the Supreme Court dismissed the appeal. They refused to revisit the presumption, stated in Province of Bombay v Municipal Corporation of the City of Bombay [1947] AC 58 and Lord Advocate v Dumbarton District Council [1990] 2 AC 580, that a statutory provision does not bind the Crown, save by express words or “necessary implication” (the “Crown exemption rule”). The Court found that the presumption is so well established that many statutes will have been drafted and passed on the basis that the Crown is not bound.

The Court went on (at paragraph [36]), to set out several propositions that constitute the rule, before applying them to the case at hand. The Court found that, although there were indications that, before the 2006 Act was passed, the prison service expected to be subject to the smoking ban, there were powerful indicators in the language of the 2006 Act that the Crown was not bound. First, the statute did not say that the Crown was bound. Second, in legislation with comparable structures and enforcement powers, there are provisions dealing with how the Act is to apply to the Crown, such as the Health and Safety at Work etc Act 1974. Third, there is a provision in section 23 of the 2006 Act binding the Crown in relation to Part 3, which deals with the Supervision of Management and Use of Controlled Drugs, as well as a provision in section 10 of the Smoking, Health and Social Care (Scotland) Act 2005 binding the Crown for the Scottish equivalent to the smoking ban. Therefore the silence on the point in Part 1 of the 2006 Act implies that that Part does not bind the Crown.

Commentary

In Black the Supreme Court did not conclude that the Crown cannot be bound by the smoking ban, but rather that the 2006 Act does not provide for the Crown to be bound. One of the principles explained by the Court in its judgment is that the Crown exemption rule is one of statutory interpretation, rather than a strict immunity from liability.

It is a rule that, nonetheless, raises a number of questions for debate.

First, it may be argued that the Crown exemption rule renders the law less accessible: without legal training anyone reading the 2006 Act might reasonably assume it binds the government. In consequence, there may be a danger that the issue of whether a particular law should bind the Crown may not receive the prominence it deserves.

Second, the rule might be considered to make the law less certain. Without it, it would be unnecessary to ask a Court to determine whether there was a “necessary implication” that the Crown was bound (a task that would perhaps have been harder and less certain in Black, had there been no reference to the Crown in the equivalent Scottish provisions or other Parts of the 2006 Act).

Third, it may be considered surprising to some that, where there is no express provision, the starting point is a rule of statutory construction that has the effect that legislation does not apply to Crown servants. As the Supreme Court noted (see paragraph [33] of the judgment), Paul Craig has highlighted that the Crown exemption rule is not always in the mind of the parliamentary draughtsperson, such that where the rule is not contemplated, the Crown could be exempt from provisions that were intended to apply universally. For example, the Offences Against the Persons Act 1861 contains no provision relating to the Crown: strict application of the rule might be argued to have the result that Crown servants are not committing offences if, in the course of their duties, they commit one of the offences contained within that Act.

At present, there is no difficulty with Parliament adding a provision to any Act to make it bind the Crown (indeed this is given as a justification for upholding the rule), but it could equally easily add explicit exemptions where desirable. In the circumstances, and given the considerations noted above, it might be argued that the latter approach is preferable and more in keeping with democratic norms.

It is, of course, easy to see why certain laws should not bind the Crown. Soldiers need to be able to carry guns without obtaining a licence from their local constabulary, for example. In the case of the smoking ban, a key part of the statutory scheme is a regime of inspection and enforcement. It is plainly undesirable that local government officials should have a right to enter and inspect all government buildings – in the context of this case, for example, arriving at a high security prison and demanding to inspect the premises.

It is also sometimes unnecessary for laws to bind the Crown. The Government had already voluntarily introduced smoke-free offices, and there is no suggestion that breaches of the rules by civil servants were being tolerated. Even in the prison context, plans for entirely smoke-free prisons (including the residential areas or cells) are well underway.

However, it is open to question whether these justifications for Crown exemption bear on what should be assumed where a statute does not contain a provision on Crown application.

It is noteworthy that Lady Hale suggested (at paragraph [35]), that there is a strong case for Parliament to clarify the rule in primary legislation. Regardless of any view of the merits of the Crown being exempt from certain legal provisions, it might be considered a positive step for the clarity of UK law, to have a short provision simply stating: “Unless otherwise provided, all Acts bind the Crown.” The transitional provisions would be slightly more complicated: naturally it could only apply to subsequent statutes, not to previous legislation that was based on the opposite assumption. But what about later statutes amending earlier Acts, or later statutes which say they must be read with a prior statute since together they create a comprehensive code? Which rule of interpretation then applies? Should such a provision ever be introduced, the Office of Parliamentary Counsel would have an unenviable task.

This post was drafted by Alex Du Sautoy and Vincent Scully, both pupil barristers at 6KBW.

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Failing to prevent the facilitation of tax evasion: note on Government's guidance

The Criminal Finances Act 2017 introduced two new offences (the first relating to the UK and the other to a foreign jurisdiction), each committed where a relevant body (those most affected by the new offence are likely to be in the financial services, legal and accounting sectors) fails to prevent an associated person criminally facilitating the evasion of a tax. Where the relevant body has put in place reasonable prevention procedures to prevent the criminal facilitation of tax evasion by an associated person (or where it is unreasonable to expect such procedures) the relevant body shall have a defence.

In late 2017, HMRC published guidance explaining the policy behind the new offences. The guidance offers suggestions as to the types of processes and procedures that can be implemented to prevent associated persons from criminally facilitating tax evasion. Such prevention procedures are, according to the guidance, to be informed by six non-prescriptive principles that advisers should take into consideration when determining how best to formulate prevention procedures on behalf of relevant bodies. This note (found here) has been prepared to assist advisers to understand each of the principles identified in the guidance.

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Disclosure: time to cut the Gordian knot?

Non-disclosure in criminal proceedings has long been recognised as a “potent source of injustice” (per Glidewell J in R v Ward [1993] 1 WLR 619, the successful appeal against convictions relating to the 1973 Euston station and M62 bombings). The collapse of the Liam Allan trial has brought the issue back to national attention.

Regrettably, current evidence suggests that this is not an isolated incident. The 2017 joint review of disclosure by HM Chief Inspector of the CPS and HM Inspector of Constabulary found that scheduling of unused material is “routinely poor” and, alarmingly, revelation by the police to the prosecutor of material that may undermine the prosecution case or assist the defence case is rare.”  Non-disclosure also remains the most common reason for the Criminal Cases Review Commission referring cases back to the Court of Appeal.

The disclosure regime established by the Criminal Procedure and Investigations Act 1996 (‘CPIA’) was the statutory response to notorious miscarriages of justice in the 1970s and 1980s, but, 20 years on, it does not appear to be functioning as it always should. The recent explosion in the volume of electronic material is posing still further challenges for investigators and prosecutors seeking to comply with the regime by identifying disclosable material. The R v R & Others [2015] EWCA Crim 1941 is a prime example. The unused material constituted 7 terabytes of data. At the point the case was stayed (the decision was later overturned on appeal) there had been no progress beyond primary disclosure for five years.

The SFO is turning to technology for answers. In the Rolls Royce case, artificial intelligence was used to sift, index and summarise documents.  While that may provide the long-term solution, the software is not readily available beyond the SFO, not least because of cost.

Some commentators and academics suggest the solution lies in adopting the currently forbidden ‘keys to the warehouse’ approach whereby the defence are given access to all material obtained during the investigation (subject to limited public interest grounds for non-disclosure). That would undoubtedly represent a dramatic shift in the approach to disclosure in England and Wales. If we look to other jurisdictions, however, the proposal is not as radical as it might first seem.

In most civil law jurisdictions, the defence have access to all material obtained during the investigation. Generally, in inquisitorial systems, the prosecution prepares for the investigating judge a dossier that contains all the evidence and the full record of the investigation. The judge will then grant the defence access to the full file at some point in the proceedings; exactly when depends on the jurisdiction.

The approach in common law jurisdictions varies. Canada, for example, allows the defence full access to all relevant material obtained in the investigation. In the landmark ruling in R v Stinchcombe [1991] 3 SCR 326, the Canadian Supreme Court affirmed that all relevant information, including unused material, must be disclosed subject only to the reviewable discretion of the prosecution to withhold material irrelevant to the case or on public interest grounds (such as national security or witness safety).

The Canadian Supreme Court dismissed the suggestion that such a general disclosure duty was incompatible with an adversarial system as contrary to the burden of proof and the function of the prosecutor as a minister for justice. Sopinka J went further and observed that:

“…the fruits of the investigation which are in the possession of counsel for the Crown are not the property of the Crown for use in securing a conviction but the property of the public to be used to ensure that justice is done.”

Sopinka J also pointed to a further principled argument for full disclosure, namely, that the decision as to whether an unused witness statement was “…sufficiently useful to put into evidence should be made by the defence and not the prosecutor.” 

Similarly, in England and Wales, it is arguable that notwithstanding the provision of a carefully-worded defence statement, a defendant remains in a better position to know what might assist her case than the most diligent prosecutor.

In the USA, the ‘Brady rule’ (so-called after the seminal Supreme Court case of Brady v Maryland 373 U.S. 83 (1963)) provides a constitutional right to exculpatory material. There is, however, a growing ‘open file’ trend at State-level, partly in response to restrictive Federal discovery rules. Some of those schemes make reciprocal defence disclosure a condition of full access to the case file to ensure equality of arms.

The proponents of such schemes argue that they improve efficiency by avoiding pre-trial disclosure arguments and appeals and allow defendants to make better-informed and timely plea decisions. Those points accord with the reasoning of the Canadian Supreme Court in Stinchcombe, which found that any increase in prosecutorial workloads because of full disclosure would be offset by the time saved in resolving disclosure disputes. The ‘open file’ approach would also arguably reduce the scope for police or prosecutorial incompetence or impropriety and improve confidence in the fairness of trials.

Such an approach is also not entirely without precedent in England and Wales. Before the CPIA regime, the common law had developed its own answers to non-disclosure. In 1993, Ward (supra) established a new disclosure standard: all evidence of help to the accused should be disclosed. The Court of Appeal emphasised that,

“…all relevant evidence of help to the accused” is not limited to evidence which will obviously advance the accused’s case. It is of help to the accused to have the opportunity of considering all the material evidence which the prosecution have gathered, and from which the prosecution have made their own selection of evidence to be led.”

That potentially broad obligation was clarified in the later cases (see most notably R v Keane [1994] 1 WLR 746 which held the test was one of materiality). Ultimately, the CPIA, which came into force a few years later, curtailed the prosecutorial disclosure obligation. It must be remembered, however, that the statutory scheme requires that a full schedule of material in the possession of the prosecution is always provided to the defence, save for material which attracts public interest immunity. The defence are, therefore, always made aware of the existence of material and can request copies of it. If the prosecution decline to provide access to the material then application can be made to a judge.

Shifting the burden of identifying material that might undermine the prosecution or assist the defence to the defendant does present its own difficulties. Arguably it is inefficient as the time and cost of examining vast quantities of unused material would fall on both sides, instead of the prosecution alone. To accommodate that, the current public funding arrangements for defence lawyers, which do not provide for specific remuneration for reviewing unused material, would have to change. Even then, it is unlikely to be workable in the most document-heavy cases as the defence would require enormous resources, in terms of both manpower and IT systems, to review all the material. In short, and perhaps unsurprisingly, there are practical difficulties with any disclosure regime.

In the final analysis, such a sweeping change is unlikely to be attractive to the legislature. There is after all broad consensus that the CPIA provides a principled, Article 6 ECHR compliant disclosure regime. The recent criticism relates to its practical implementation and the 2017 joint inspection report provides a series of recommendations from better training to improved strategic oversight which, if implemented properly, would go some way to remedying those concerns.

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Annabel Darlow QC
Will Hays
Annabel Darlow QC and Will Hays
19 December 2017

Money-laundering: a possible loophole for property derived from 'registration offences'?

The US special investigation into ‘Russian influence’ in the 2016 US Presidential election alleges that Paul Manafort acted as a “foreign agent” and that he laundered the proceeds of that conduct. This article considers the case law from England and Wales that may suggest that any property acquired by Mr Manafort through his activities as a “foreign agent” would not count as “criminal property” so that there could have been no “money laundering”.

The starting point of the discussion is the underlying criminal conduct alleged in the USA: it is unlawful to act as an agent of a foreign principal unless a true and complete registration statement has been filed with the Attorney General (Title 22, United States Code, sections 612 and 618). The offence follows a familiar form, whereby certain conduct is lawful provided it has been properly ‘registered’ or ‘licensed’. Such an offence may be described as a ‘registration offence’.

In this jurisdiction it has been held in the context of certain registration offences that a person, D, who commits such an offence does not in law obtain any property “as a result of or in connection with” his criminal conduct. For example, in R v Sumal and Sons (Properties) Limited [2012] EWCA Crim 1840, [2013] 1 WLR 2078 it was held that where a person committed a criminal offence by renting out a property without a licence, the rent was not obtained as a result of the criminal conduct. The Court held that the rent was obtained as a result of the rental agreement, not because no licence was in place. Similarly, in R v McDowell and Singh [2015] EWCA Crim 173; [2015] 2 Cr. App. R. (S.) 14 the Court of Appeal held that where a person profits from the criminal offence of unregistered scrap dealing, he does not “obtain property” as a result of that offence. The profits were obtained as a result of the scrap dealing, not as a result of the failure to be registered.

The argument adopted by the Court of Appeal seems to depend on the idea that it is possible to divide the circumstances of the criminal conduct into (a) the actual conduct – which was lawful apart from the fact that he was not registered and (b) the context which rendered the conduct “criminal”, namely the failure to be registered.

These authorities were concerned with confiscation under Part 2 of the Proceeds of Crime Act 2002. Since nothing was obtained from the criminal conduct there was no “benefit” and there could be no confiscation of assets. However the argument reads across to money-laundering: if nothing is “obtained” from a registration offence, there can be no “criminal property” to be laundered. If the argument is correct, it means a person accused of money laundering could mount a defence on the basis that the money derived from a registration offence.

But the argument has unpalatable consequences. It is lawful to supply controlled drugs provided a licence is in place (see Regulation 5 of the Misuse of Drugs Regulations 2001). Pushed to its logical conclusion the argument suggests that it would be a defence to money laundering to say that the money derived from the supply of controlled drugs (which would be lawful if the person obtained a licence). The argument would be that the money derived from a registration offence (the supply of controlled drugs) and since a person who commits a registration offence does not obtain anything as a result of that offence, no criminal property came into existence which could be ‘laundered’.

Quite apart from the potentially absurd consequences of the argument identified above, there are at least two reasons to be cautious before advancing the argument. First, context is key. The Court of Appeal has held, distinguishing the other cases, that a person may “benefit” from his crime in the following contexts: unlicensed arms dealing (McDowell and Singh, supra); unlicensed security provision (Palmer [2017] 4 WLR 15) and carrying on business in a prohibited name (Neuberg (No 2) [2017] 4 WLR 58). Second, whether a “benefit” can be obtained from a particular registration offence seems to depend on whether the conduct is (a) unlawful, except where covered by a licence or (b) lawful, but only where covered by a licence. This is a fine distinction which appears to be a distinction without a difference.

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Righting another ‘wrong turn’? Dishonesty in Ivey v Genting: Part II

In this second of two posts (the first can be found here), the criticism of the Ghosh test is considered, together with a brief outline of the concept of dishonesty in the civil cases and some reflections on the future application of Ivey in practice.

The trouble with Ghosh

The decisions in Feely and Ghosh attracted a good deal of academic criticism, among others: D.W. Elliott, “Dishonesty in Theft: A Dispensable Concept” [1982] Crim LR 395; E. Griew, “Dishonesty: The Objections to Feely and Ghosh” [1985] Crim LR 341;  K. Campbell, “The Test of Dishonesty in Ghosh” [1994] 43 CLJ 349.

The essential criticisms were these:

  1. The cases did not actually provide a definition of dishonesty. Instead the jury (or magistrates) were left to give “dishonesty” whatever meaning they thought fit, having regard to prevailing social mores.  By consequence the test was not a legal one but depended on the moral views of the jury.  Moreover, simply because “dishonesty” was an ordinary English word, it did not follow that the jury should be given an uncontrolled discretion over its meaning and application.
  2. The concept of dishonesty had become a central positive feature in offences of property when it should more properly function as a negative feature, controlling liability that would otherwise arise in respect of prima facie unlawful conduct.
  3. The cases created the possibility that some persons would be acquitted on facts not differing in any material respect from those upon which other persons would be convicted.
  4. The cases assumed that juries and magistrates in England and Wales were culturally homogeneous with known and shared standards.  However, the object of the criminal law was to protect property rights and disrespect for those rights abounded – no such shared values could properly be relied upon.
  5. The cases mistook the meaning of dishonesty (a legal concept) with standards of behaviour (an ethical one).
  6. The test risked more trials as defendants had little to lose by pleading not guilty and hoping that the dishonesty element was not made out.
  7. The second limb of the Ghosh test in particular allowed the accused to escape liability where he had made a mistake of fact as to contemporary standards of honesty.  That was no proper reason for excusing criminal liability in the context of property offences – nor did such a concept operate elsewhere in the criminal law.  The Ghosh test attached too much weight to the opinion of the defendant at the expense of the rights of the victims of property offences and the criminal law does not ordinarily excuse individuals who believe that their conduct would be acceptable to others.

Wider concerns

The Ghosh test was also heavily criticised by the Law Commission.  In “Fraud and Deception (Law Commission Consultation Paper No. 155, 1999)” the academic critique of the Ghosh test was found to be compelling (at paragraph 5.28).  It was noted, among other things, that the only apparent function of the second limb of the Ghosh test was to allow a defendant to escape liability on the basis of mistake of fact about what the standards of dishonesty were among the general public: that is to say, a defendant’s misunderstanding of the moral beliefs held by the rest of society provided a basis for an acquittal.

Interestingly, however, in its later report, Fraud (Law Com No. 276, 2002), the Law Commission softened its criticism of the Ghosh test and expressed the view that its application in practice was “unproblematic” (paragraph 5.18).

It is notable in this regard that the Fraud Act 2006 came to be passed on the basis of the law as it stood in Ghosh – criticism and allSome have raised whether, in this context, the decision in Ivey might be considered judicial activism.

Though the position in other common law jurisdictions was not considered in Ivey, it is interesting to reflect that leaving the concept of dishonesty to the uninstructed view of the jury was rejected in Australia only a couple of years before GhoshR v Salvo [1980] VR 401.

In Salvo, the defendant (a used car dealer) sold a car to K, taking from K another car in part exchange.  Salvo then sold the car received from K.  He then discovered that K had no title to sell the car and was put to the expense of perfecting the title of the vehicle.  He then decided to repurchase the car he had sold to K using a worthless cheque.  His conviction for dishonestly obtaining the vehicle (by falsely representing that the cheque would be honoured) was quashed on appeal on the basis that a claim of right is a defence to a charge of obtaining.  The three judges considered the concept of dishonesty and the majority (Murphy and Fullager JJ;  McInerney J dissenting) rejected the approach in Feely while McInerney J held that Feely was rightly decided.  Fullager J found that dishonesty was not a word to be left to the jury on the basis of its ordinary meaning but, rather, meant “with disposition to defraud i.e. with disposition to withhold from a person what is his right”.  The decision in Salvo was followed in Brow [1981] VR 783 and Bonello [1981] VR 633.

Concerns about “dishonesty

Perhaps alive to these criticisms, it is apparent that the senior judiciary had been concerned for some time before Ivey about the concept of dishonesty in the criminal law and, further, an apparent divergence with civil law, especially in relation to dishonest assistance in breach of trust.

In Starglade Properties Ltd v Nash [2010] EWCA Civ 1314, Leveson LJ added a “note of concern” to his judgment if it was the case that “the concept of dishonesty for the purposes of civil liability differed to any marked extent from the concept of dishonesty as understood in the criminal law”.  He noted that the point was apt to be considered by the Court of Appeal (Criminal Division) (at [42]).

Subsequently, a five-judge Court of Appeal heard the case of R v Cornelius [2012] EWCA Crim 500 in which the issue as formulated between the parties included the correctness of the Ghosh test.  Ultimately it proved unnecessary to examine Ghosh.  It may be a matter of interest however, that the position adopted by the respondent Director of Public Prosecutions was that the Ghosh test was wrong and ought to be abandoned in favour of the test applicable in civil proceedings, as articulated by Lord Nicholls in Royal Brunei Airlines Snd Bhd v Tan [1995] 2 AC 378.

The civil cases in overview

In Royal Brunei Airlines Snd Bhd v Tan [1995] 2 AC 378, Lord Nicholls held that dishonesty was the necessary and sufficient condition of liability in cases of dishonest assistance in breach of trust.  The test of dishonesty, in such cases, was an objective one (at page 389).  To the extent that dishonesty required a subjective element, it was to be derived from the fact that it described a type of conduct assessed in the light of what a person actually knew at the time of the breach.  It was not to be found (as in Ghosh) in what a reasonable person would have known or appreciated about that conduct.  Put another way, as Lord Nicholls expressed the test, a person’s knowledge of a transaction or conduct had to be such as to render his participation contrary to normally acceptable standards of honest conduct;  it did not require that he should have had reflections about what those normally acceptable standards were. 

The decision of the Privy Council in the Royal Brunei Airlines case was considered by the House of Lords in Twinsectra v Yardley [2002] 2 AC 167.  In Twinsectra a majority (Lord Slynn of Hadley, Lord Steyn, Lord Hoffman, Lord Hutton; Lord Millett dissenting) held that a finding of liability was only permissible, where following the application of a combined subjective and objective test, dishonesty was established – a Ghosh type test.  However, the decision in Twinsectra Ltd. was explained by the Privy Council three years later in Barlow Clowes International Ltd (in Liquidation) and others v Eurotrust International Ltd [2006] 1 WLR 1476.  In that case it was decided that the test whether a person was consciously dishonest in providing assistance in breach of trust required him to have knowledge of the elements of the transaction which rendered his participation contrary to ordinary standards of honest behaviour, but did not require him to have reflections on what those normally acceptable standards were.  This approach appears to have been followed by Arden LJ in Abu-Rahmah and another v Abacha and others [2007] 1 Lloyd’s Rep 115, the Court of Appeal (Pill, Rix and Arden LJJ) and in Starglade (supra).

In broad summary, the combined effect of the cases in the civil law was that a finding that the defendant was dishonest need only involve an assessment of his participation in the light of his knowledge of the facts of the transaction.  It is this test which now forms the test of dishonesty for the purposes of the criminal law.

The approach for juries following Ivey

The approach as set out in Ivey that the criminal law ought to follow what was said by Lord Nicholls in Royal Brunei Airlines, would seem both principled and of practical merit.

As to what constitutes this test, and how it is to be approached in criminal trials, it may be of assistance to highlight two passages in the civil authorities in particular concerning the extent to which the factual circumstances (including the characteristics of the defendant) may be taken into account.

In Royal Brunei, Lord Nicholls made plain (at page 393):

…. when called upon to decide whether a person was acting honestly a court will look at all the circumstances known to the [defendant] at the time.  The court will also have regard to personal attributes of the [defendant], such as his experience and intelligence, and the reason why he acted as he did.

In Starglade Properties Ltd, the Chancellor summarised the effect of what Lord Nicholls had said in the following way (at paragraph 25):

There is a single standard of honesty objectively determined by the court.  That standard is applied to specific conduct of a specific individual possessing the knowledge and qualities he actually enjoyed.

In sum, the task for the jury is first to find the facts:  what did the defendant do and with what possible intention, belief or other state of mind that is relevant to the offence charged?  The second task is to decide whether the defendant was acting as an honest person would in the circumstances, applying their standards as ordinary and reasonable people.

Concerns addressed?

In conclusion it is perhaps interesting to reflect that, while some of the more trenchant criticisms of Ghosh have been addressed by Ivey (viz. a defendant’s ability to escape liability based on his misunderstanding of prevailing moral standards), the importation into the criminal law of the test in Royal Brunei is not without potential difficulty.

Dishonesty” remains a concept left to the jury which is undefined (save by reference to their own standards) and subject to potentially widespread variation.  Two defendants may still experience different outcomes before different juries on identical facts.  The concept of honesty among a jury drawn from Southwark may differ markedly from those among a jury drawn from Tunbridge Wells.

More significantly perhaps, “dishonesty” remains a central feature in property offences, as opposed to a limiting factor, controlling liability in respect of prima facie unlawful conduct.  This is worthy of particular attention in cases of conspiracy to defraud where the parameters of what constitutes unlawful conduct are strikingly wide, namely:  an agreement to pursue a course of conduct which risks prejudice to the economic interests of a third party.

In circumstances where the operation of basic capitalist economies routinely and inevitably risks economic prejudice to a third party, “dishonesty” forms the crucial ingredient which engages the stigma of the criminal law.  Whether it is right that this is a matter which should be left to a jury as a test of fact, or morality, as opposed to a concept which is a matter of law is perhaps a matter which requires further scrutiny.  The alternative would seem to risk, in effect, the creation by stealth of a generalised property offence of dishonesty – a matter on which Parliament has repeatedly declined to legislate.

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Righting another ‘wrong turn’? Dishonesty in Ivey v Genting: Part I

This blog has previously featured a summary of the landmark judgment in Ivey v Genting Casinos (UK) Ltd [2017] UKSC 67 and a post examining the dishonesty test now to be applied in criminal proceedings. Our analysis continues with two in-depth posts. In this, Part I, the background to the decision in Ivey is examined, along with a consideration of the Ghosh test and its operation in practice.  In Part II, the academic criticism of Ghosh is discussed together with a brief account of the concept of dishonesty in the civil cases, and some reflections on the future application of Ivey in practice.

The issue

The case concerned a professional gambler who sued a casino for his winnings at a game of Punto Banco (£7.7 million). The issues arising before the Supreme Court included whether the concept of cheating at gambling necessarily required ‘dishonesty’ and, if so, what the proper test for dishonesty would be in the circumstances, namely the test applicable in civil or criminal proceedings.  As Lord Hughes explained, the test of dishonesty in civil proceedings was whether the conduct was dishonest by the ordinary standards of reasonable and honest people (an objective test); the test in criminal proceedings, (pre-Ivey) was the two-limbed Ghosh test, namely: (i) whether the conduct was dishonest by the ordinary standards of reasonable and honest people; and, if so, (ii) whether the defendant knew his conduct was dishonest by those standards (an objective subjective test).

The judgment

In the event, Ivey was decided on the basis that dishonesty formed no part of the concept of cheating.  Accordingly, on one view, the discussion of dishonesty in the judgment might be said to be obiter and confined to the circumstances of a civil action.  The better view, however, would seem to be that the judgment represents the current state of the criminal law on dishonesty and that the two-limb test in Ghosh has been overruled.  Certainly that was the view expressed by the President of the Queen’s Bench Division in DPP v Patterson [2017] EWHC 2820 (Admin) (at [16]):  “It is difficult to imagine the Court ofAppeal preferring Ghosh to Ivey in the future.”

The judgment was the unanimous decision of a Court which included the President, future President, and the former Lord Chief Justice (Lord Neuberger, Lady Hale, Lord Kerr, Lord Hughes and Lord Thomas).  The position on any future appeal to the Supreme Court is, to that extent, predictable and it is notable that Lord Hughes expressed himself in unambiguous terms: “directions based upon [Ghosh] ought no longer to be given” (at [74]).

It follows that the directions as formulated in the current edition of the Crown Court Compendium: Part I Jury and Trial Management and Summing Up (February 2017) (pp 8-16 to 8-19) would appear to have been superseded. There is no longer a requirement for any jury to consider the subjective state of mind of a defendant as to whether his conduct was dishonest or not.

Following Ivey, the entirety of the test of dishonesty in the criminal law is now objective.  Juries are to be directed accordingly on a straightforward question: was the defendant’s conduct dishonest by the ordinary standards of reasonable and honest people?  Whilst answering that question may take account of all the circumstances, as the jury find them to be (including the defendant’s state of knowledge, belief or suspicion), a defendant’s own evaluation of his conduct no longer forms part of the test.

Righting another wrong turn?

In abandoning the Ghosh test the Supreme Court has taken another step to clarify certain areas of doctrinal debate arising from decisions of the House of Lords and Privy Council in the early 1980s.  Ivey sits alongside the seminal decisions in G v R [2003] UKHL 50, resolving controversy as to the proper test of recklessness following R v Caldwell [1982] AC 341; and R v Jogee, ‘righting’ a wrong turn in the test for parasitic accessorial liability derived from Chan Wing Siu v The Queen [1985] AC 168).

The genesis of the controversy surrounding the Ghosh test can be traced at least to R v Feely [1973] QB 530.  Feely concerned the manager of a betting shop who took £30 from the till for his own purposes.  This was contrary to his instructions, but he had a right of set-off for this amount in respect of money owed to him by his employer, so his employer was not placed at any financial risk.  His conviction of theft was quashed because the trial judge had removed the issue of dishonesty from the jury.

The Court of Appeal decided that it was for the jury to determine whether what the defendant did was dishonest applying the current standards of ordinary decent people.  This test was a notable departure from the test under the old law of larceny (prior to the Theft Act 1968) – which left the concept of ‘fraudulently’ as a matter for the judge – and from the practice envisaged by the drafters of the 1968 Act, in which the concept of dishonesty was expected to play only a minor role.

As a result of Feely, the criminal law relating to property offences changed significantly:  it was now for a jury to decide on what constituted dishonesty by reference to the prevailing moral standards and whether the defendant had transgressed those standards.

In a number of cases that followed it was held that the jury were required to take into account not only the prevailing moral standards but also the defendant’s own opinion on whether he acted honesty:  R v Gilks [1972] 1 WLR 1341;  Boggelin v Williams [1978] 1 WLR 873;  R v Landy [1981] 1 WLR 355.

This approach to dishonesty was disapproved in R v McIvor [1982] 1 WLR 409, where, in order to avoid the implications of the earlier decisions, it was held that in a case of conspiracy to defraud a different test was to be applied.

It was against this background that the Court of Appeal came to consider Ghosh.

The Ghosh test

In Ghosh, the Court of Appeal (Lord Lane CJ, Lloyd and Eastham JJ) held that in determining whether the prosecution has proved that a defendant was acting dishonestly involved a two-stage objective-subjective test.  Lord Lane CJ stated (at paragraph 1064D):

… a jury must first of all decide whether according to the ordinary standards of reasonable and honest people what was done was dishonest.  If it was not dishonest by those standards that is the end of the matter and the prosecution fails.

If it was dishonest by those standards then the jury must consider whether the defendant himself must have realised that what he was doing was by those standards dishonest.  In most cases, where the actions are obviously dishonest by ordinary standards, there will be no doubt about it.  It will be obvious that the defendant himself knew that he was acting dishonestly.  It is dishonest for a defendant to act in a way which he knows ordinary people consider to be dishonest, even if he asserts or genuinely believes that he is morally justified in acting as he did. 

By introducing such a test, which looked first to the standards of reasonable and honest people and then to the defendant’s own state of mind, the Court of Appeal attempted a compromise.  On the one hand it modified the objective test, as set out in Feely, which some considered to be overly harsh, but it avoided the purely subjective approach of Gilks, which some considered to create a thief’s charter.

As to when the direction was to be given requiring a jury to apply the test in Ghosh, the Court of Appeal clarified the position in R v Price (1989) Cr App R 409:

… it is by no means in every case involving dishonesty that a Ghosh direction is necessary.  Indeed in the majority of such cases, of which this was one, it is unnecessary and potentially misleading to give such a direction.  It need only be given in cases where the defendant might have believed that what he is alleged to have done was in accordance with the ordinary person’s idea of honesty.

Put another way, Price made clear that the Ghosh test was in fact only to be applied by juries in circumstances where the second limb of the test arose for consideration, namely the defendant’s evaluation of whether his conduct was aligned with general standards of morality.

It is right to note that in practice, the Ghosh direction is now most frequently given in cases involving complex financial frauds.  In such cases it has commonly been a live issue whether, for example, a trader in esoteric financial instruments believed that what he or she was doing was dishonest by the standards of ordinary people given the conduct in which he or she engaged was widespread within the industry.

Part II will be published next week.

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Fiona Alexander
Fiona Alexander
28 November 2017

Dwell not: DPP v Distill [2017] EWHC 2244 (Admin)

The concept of a “dwelling” has some significance in the criminal law. A burglar who commits their crime in a dwelling is sentenced more harshly than if they were to have burgled a non-dwelling, such as a shop. In the context of the Public Order Act 1986 (“the Act”), a person cannot commit the offence of causing harassment, alarm or distress under section 5 when they use the words or exhibit the behaviour when they are inside a dwelling and the affected person is also inside a dwelling. For the purpose of that Act, a dwelling is defined in section 8 as “any structure or part of a structure occupied as a person’s home or as other living accommodation (whether the occupation is separate or shared with others) but does not include any part not so occupied, and for this purpose ‘structure’ includes a tent, caravan, vehicle, vessel or other temporary or movable structure…”

It was the understanding of the concept of “dwelling” in the context of section 5 of the Act that the High Court grappled with in DPP v Distill [2017] EWHC 2244 (Admin). The case arrived at the High Court by way of case stated from the magistrates’ court. The matter arose from an alleged incident in which the respondent, when in the back garden of her grandmother’s property, was said to have shouted racist abuse; this was heard by neighbours in the adjoining property, who also happened to be in their back garden. The respondent denied using the words, but she was charged with an offence under section 5(1) of the Act for using threatening or abusive words or behaviour within the hearing of a person likely to be caused harassment, alarm or distress. Furthermore, the offence was alleged to have been racially aggravated within the terms of section 28 of the Crime and Disorder Act 1998, contrary to section 31(1)(c) and (5) of that Act.

It was accepted as between the parties that the incident had taken place wholly within the back gardens of the adjoining properties. At trial, the magistrates found that the definition of a “dwelling” includes a private garden such as the back garden which featured in this case, and therefore, no offence had been committed. Having made this pre-trial ruling, the magistrates’ ruled that there was no case to answer at the close of the prosecution case. The High Court was asked by the magistrates’ court whether it was correct in its ruling that the incident had occurred inside a dwelling.

The High Court ruled that the magistrates’ court was not right to have made this ruling. It was argued on behalf of the respondent that the Court could be assisted by looking at the meaning attributed to the words “dwelling” and “dwelling-house” in other statutory concepts. The Court, however, agreed with the appellant: to establish the scope of the exception, the Court should concentrate on the language of the Act itself. In making its ruling, the Court first looked to case law relating to section 4 of the Act (the causing of fear or provocation of violence), which also cannot be committed where the words or behaviour are used by a person inside a dwelling where the affected person is also inside that or another dwelling. In Atkin v DPP (1989) 89 Cr App R 199, Henry J observed that the intention of Parliament in drafting this exception was to exclude domestic arguments from the reach of the criminal law even where those arguments would, if repeated outside the dwelling, create an offence.

The Court also reflected on the judgment of the Court of Appeal in R v Francis [2006] EWCA Crim 3323. In that case, the Court of Appeal considered the offence under section 4A of the Act (intentional harassment, alarm or distress). This is another offence that cannot be committed when the person is inside a dwelling. Giving the judgment of the Court, Moses LJ recognised that the “area where a person may indulge in the conduct prohibited by [section] 4A with impunity are … narrowly confined”; the offence can be committed in public or in private but not a structure or part of a structure which is occupied as a person’s home or other living accommodation.

Having reviewing the case law relevant to sections 4 and 4A of the Act, Lindblom LJ, giving the judgment of the Court, ruled that the exception to the offence in section 5(2) is narrowly drawn and that Parliament intended it to cover words or behaviour used by persons in domestic gardens as well as words or behaviour used by persons inside dwellings. The Court recognised that the definition of “dwelling” in section 8 of the Act must be something that can be described as a “structure” or “part of a structure”, and considered that the ordinary meaning of “structure” is something that is built or constructed. The Court held that it follows that, in some circumstances, a garden could itself be a “structure” forming an integral part of the building (a roof garden or a winter garden), and that some gardens contain “structures” (pergolas, treehouses, or gazebos). However, the Court recognised that, ordinarily, a front or back garden would not be regarded as a “structure” or “part of a structure”. Lindblom LJ continued, saying that even if a garden was physically “a structure” or part of one, it would not normally be regarded as being a structure “occupied as a person’s home or as other living accommodation” as that would usually be the part of the building in which that person resides. Finally, the Court pointed out that this understanding of “dwelling” in section 8 is consistent with the use of the words in section 5(2), according to which the offence cannot be committed by a person “inside a dwelling”. As Lindblom LJ pointed out, one would not normally use the preposition “inside” when referring to a person who was in a garden. The Court roundly rejected the argument that a back garden of a dwelling falls within the definition of “dwelling” in section 8.

When instructed in cases involving similar allegations, it will be important to consider where exactly the offence is said to have taken place. However, as this judgment makes clear, the exclusion is very tightly drawn. In most cases, where words are said or someone behaves in a way likely to cause harassment, alarm or distress in an ordinary garden of an ordinary home, this exception will not apply.

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How now to spot dishonesty

What place a defendant’s state of mind following the Supreme Court decision in Ivey v Genting [2017] UKSC 67?

Until Mr Ivey challenged the refusal of the Genting Casino to pay the £7.7 million he had won at Baccarat using an edge-sorting technique that he called legitimate and they called cheating, a defendant charged with an offence of dishonesty would have had a fairly good idea how a jury considering her conduct would have decided whether it had been dishonest. Since 1982, when the locum surgeon Mr Ghosh was convicted of claiming fees for operations undertaken by others, the jury would have asked itself not only whether the conduct was dishonest by the standards of reasonable and honest people (amongst whom they would have included themselves), but whether the defendant realised that ordinary honest people would consider the behaviour to be dishonest. Since the Supreme Court concluded that Genting’s categorisation of Mr Ivey’s conduct was the correct one and took the opportunity to look again at how a jury ought to spot dishonesty, a defendant’s position on the face of it has changed. But how much?

The Supreme Court was keen to remove a defendant’s own realisation that reasonable and honest people would consider her conduct dishonest from the equation. It was concerned that this could place a defendant with a warped view of the world in a better position than one in touch with contemporary morality. However, the Court did not in the process make the actual state of mind of a defendant irrelevant. Its relevance is to the state of knowledge as to the factual context of her conduct. As Lord Hughes identified (at para.60), taking the example of a person accused of travelling on a bus without paying, if they genuinely believe that public transport is free then there is objectively nothing dishonest about not paying. Similarly (taking the facts of the pre-Ghosh decision in Feely [1973] QB 530), if an employee takes money from the till, knowing that this is not permitted but intending to pay it back the next day, the objective assessment of his conduct in terms of dishonesty will differ from another employee who takes from the till without making any attempt to repay.

Whilst it could be argued that the dishonesty issue that the Supreme Court had to resolve in Mr Ivey’s case was not the question of whether the test described by Lord Lane CJ in Ghosh [1982] QB 1053 was correct, it could equally be argued (as Lord Hughes observed at para.55) that Lord Lane had not been required to devise his two part test in order to address whether it was dishonest to claim for work others had done as Mr Ghosh had. Moreover, it would be brave to suggest that the unanimous and unequivocal rejection of the Ghosh test should not be followed. As Sir Brian Leveson observed in DPP v Patterson [2017] EWHC 2820 (Admin), “it is difficult to imagine the Court of Appeal preferring Ghosh to Ivey in the future” (at para. 16).

In any event, the Supreme Court has taken the opportunity to restate the test for dishonesty that has generally been applied by courts and juries, namely by reference to her state of knowledge of the factual context of her actions judged against the assessment of reasonable persons.  For example, the Crown Court Compendium [8-6] recognises that it has been “unusual” to address the second Ghosh question.  Moreover, this is an approach that juries have already been applying in all manner of other contexts, such as whether someone’s claim to be acting in self-defence was reasonable, or whether their knowledge or belief was genuine by reference to whether it was reasonable.

And so, the answer in reality and in most cases to the question of how now to spot dishonesty is much as it was before, dependent on the assessment of the jury as to whether it was dishonest in their eyes in the circumstances that the defendant was in.

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6KBW
6KBW
19 November 2017

Weekly Digest: 20 November 2017

In this week’s Digest, the Court of Appeal quashed one of the twelve convictions of the entertainer Rolf Harris; Sir Brian Leveson P observed that the Ghosh test was unlikely to be applied again following the Supreme Court decision in Ivey v Genting; and the Divisional Court considered extradition to Russia.

 

R v Rolf Harris [2017] EWCA (Crim) 1849

The judgment, available here, was handed down on 16.11.17 by Treacy LJ, sitting in the Court of Appeal (Criminal Division).

This was a renewed application for leave to appeal against the appellant’s conviction on 12 counts of indecent assault. The applicant sought to challenge this convictions on three grounds: (i) fresh evidence undermined the credibility of witnesses (WR and TL) to such an extent that the convictions on those counts were unsafe; (ii)  the conviction on counts 10 to 12 were unsafe because of a lack of disclosure on the part of the prosecution in relation to a witness (TL); and (iii) if the convictions on any of the counts were found to be unsafe, the convictions on the remaining counts were unsafe given the judge’s directions in summing up as to cross-admissibility.  The appeal was allowed in respect of count 1 and that conviction was quashed; it was dismissed in respect of the other counts.

 

R v Fletcher [2017] EWCA (Crim) 1778

The judgment, available here, was handed down on 15.11.17 by Davis LJ sitting in the Court of Appeal (Criminal Division).

This appeal concerned the safety of a number of convictions for indecent assault on the basis of inconsistency between the jury’s verdicts. Of eight counts on the indictment, the appellant was convicted of two and contended on appeal that the jury’s verdicts on the two counts on which he was convicted were wholly inexplicable in light of their verdict in respect of the other six. The appeal was dismissed. The applicable legal principles placed an onerous burden on the appellant which had not been discharged.

 

Aline Loake v Crown Prosecution Service [2017] EWHC 2855 (Admin)

The judgment, available here, was handed down on the 16.11.17.

The issue in this appeal by way of case stated was whether the defence of insanity could be raised where the defendant was accused of harassment contrary to s. 2 of the Protection from Harassment Act 1997. It was held that insanity was available as a defence as it was in respect of all other criminal offences.

Martyn Bowyer was instructed for the Respondent.

 

Director of Public Prosecutions v Vicky Patterson [2017] EWHC 2820 (Admin)

The judgment, available here, was handed down by Sir Brian Leveson P, sitting in the Administrative Court on 2.11.17.

This was an appeal by way of case stated from a decision of the magistrates sitting in Great Yarmouth dismissing, on the basis there was no case to answer, two charges of theft brought against the respondent. The magistrates had mistreated the subjective view of the respondent on dishonesty. Although the recent remarks of the Supreme Court (Ivey v Genting Casinos (UK) Ltd t/a Crockfords [2017] UKSC 67) on the test to be applied for dishonesty were strictly obiter, it was unlikely that R v Ghosh [1982] QB 1053 would now be favoured over Ivey and Ivey represented the law. It was clear that there was a case to answer.

 

Zarmaev v The Government of the Russian Federation [2017] EWHC 2705 (Admin)

The judgment, available here, was handed down by Hickinbottom LJ sitting in the Administrative Court on 02.11.17.

This was an appeal under s. 103 of the Extradition Act 2003 against the decision to send the appellant’s case to the Secretary of State for her decision on whether the appellant should be extradited to the Russian Federation. The appellant adduced fresh evidence to the effect that extradition for trial in Russia would effectively deprive him of his right to a fair trial under art. 6 ECHR. The fresh evidence was admitted and the appellant’s case was remitted to the magistrates’ court for determination of whether extradition would be compatible with art. 3 and art. 6 of the ECHR.

 

R (on the application of Michael Goldsworthy) v Secretary of State for Justice [2017] EWHC 2822 (Admin)

The judgment, available here, was handed down by Dinah Rose QC, sitting as a Deputy High Court Judge in the Administrative Court on 13.11.17.

The claimant sought to challenge the defendant’s decision to recall him to prison on the basis that it was disproportionate and unreasonable and, consequently, his detention was unlawful at common law and under Article 5 of the ECHR. The claim succeeded. The decision could not be rationally sustained because it failed to take account of obviously relevant considerations and failed properly to apply the defendant’s own policy guidance regarding when a decision should be made to recall an offender to prison.

 

In the news 

Lord Hutchinson of Lullington obituary

 

UK calls for ‘greater clarity’ on ICC’s new crime of aggression

  

Serious Fraud Office charges two Unaoil executives with bribery

 

Calls for radical reform of Scottish system for rape prosecutions

 

Tagging scheme hit by fresh delays

 

 

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Rosemary Davidson
Rosemary Davidson
15 November 2017

Co-operating after Brexit — what’s the future for security, law enforcement and criminal justice?

The Government’s paper ‘Security, law enforcement and criminal justice: a future partnership paper’ suggests that the intention is to maintain a similar level of co-operation with the EU following Brexit. However, issues such as data protection, jurisdiction and the fact that such ‘co-operation’ with a non-Member State would be unchartered territory for the EU, mean that achieving this will be far from straightforward.

 

What is the potential impact of Brexit on cross-jurisdictional crime investigation and enforcement?

Brexit is likely to have a huge impact on all areas of cross-jurisdictional crime investigation and enforcement within the European Union. In particular, it is unclear whether a post-Brexit UK will be able to continue to:

  1. participate in key EU criminal justice co-operation measures, such as the European Arrest Warrant (EAW) and the European Investigation Order (EIO);
  2. access EU criminal justice databases, such as the Schengen Information System, the European Criminal Records Information System (ECRIS, and data shared under the Prüm agreements; or
  3. play a role in institutions such as Europol and the Eurojust.

 

What does this new report tell us about the Government’s priorities on criminal justice and enforcement during the Brexit negotiations?

Although this paper is light on detail, references such as ‘avoiding operational gaps’ and the ‘opportunity to build on what has already been achieved through decades of collaboration’ suggest that the Government will be seeking to replicate the current arrangements as closely as possible.

In the paper, the Government emphasises three areas in particular as important:

  1. data sharing
  2. practical operational co-operation; and
  3. co-operation through agencies

This reflects the three main areas of EU criminal justice co-operation. Data-sharing includes access to the EU’s criminal justice databases, such as those already referred to. ‘Operational cooperation’ is a reference to arrangements such as the EIO (which the paper expressly refers to), and also the EAW and other EU mutual legal assistance measures. ‘Cooperation through agencies’ is a reference to institutions such as Europol and Eurojust. The paper makes particular reference to Joint Investigation Teams (through which EU states can jointly investigate cross-border criminal activity), a facility that the UK currently makes heavy use of.

The paper states that the UK will be seeking an UK-EU Treaty that ‘provides a comprehensive framework for future security, law enforcement and criminal justice cooperation between the UK and the EU’ although there is no detail about what, in practice, this might look like.

 

What are the main areas of challenge in securing agreement with the EU in this area?

The main hurdle is that, to date, the close levels of criminal justice co-operation that take place within the EU have been limited to Member States; there is no precedent for a so-called ‘Third State’ (ie a non-EU state) to have the type of co-operation relationship with the EU that is being proposed by the UK. While the UK is in a unique position as a (soon to be) former member of the EU, it is far from clear that the EU will be willing to continue its current co-operation arrangements once Brexit is complete.

A second problem is that the Government has identified ending the jurisdiction of the CJEU in relation to the UK as one of its ‘red lines’ in the Brexit negotiations. This is likely to be a significant hurdle in the context of criminal justice co-operation, where having a mechanism to ensure consistent application of any UK-EU agreement will be key to ensuring its effectiveness. Although the Government paper refers to the need to find a mechanism for dispute resolution, it is currently unclear whether the EU would be willing to enter into the type of close co-operation relationship being proposed by the UK without oversight by the CJEU.

A further area of difficulty is data protection. The UK’s ability to continue to share data with the EU is likely to depend on its continuing ability to conform to EU data protection requirements. This could mean that the UK would be required to implement EU data protection rules even after it has left the EU, and in circumstances where it has no influence over their content.

 

What are the key areas of concern for corporate crime lawyers?

Given the number of difficulties identified above, there is a real risk that, following Brexit, the UK will have a far less effective co-operation relationship with the EU than that which is currently enjoys.

First, the UK may have to revert to reliance on the older conventions and agreements, such as the European Convention on Extradition and the European Convention on Mutual Assistance in Criminal Matters. These are not based on the EU model of mutual recognition, and are slower and less effective than the current EU measures.

Second, the UK may lose some or all of its access to the EU’s criminal justice databases, and/or be required to continue to apply EU data-protection laws even after the UK has exited the European Union.

Third, it is likely that the UK will no longer play a leading role in institutions such as Europol and Eurojust, which will decrease the level of influence that the UK is able to exert in relation to EU criminal justice policy. This may lead to a divergence in approach, for example in relation to issues such as bulk data collection and data protection rules in the area of criminal justice.

Finally, it is worth noting that the Brexit negotiations are unlikely to be finished by the end of the Article 50 negotiating period in March 2019. This means that there will almost certainly be a transitional period during which the current arrangements will continue to apply.

This article was first published on Lexis®PSL Corporate Crime on 3 October 2017. 

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6KBW
6KBW
13 November 2017

Weekly Digest: 13 November 2017

In this Weekly Digest, the Court of Appeal considered jury directions in two cases, one relating to a conviction for gross negligence manslaughter, the other to directions and summations that were found to be overtly favourable to prosecution witnesses. There are also two sets of interesting first instance sentencing remarks, one relating to the murder of a child and the other to a complex tax fraud scheme.

R Mohammed Khaique Zaman [2017] EWCA Crim 1783

The judgment, available here, was handed down by Hickinbottom LJ sitting in the Court of Appeal on 08.11.17.

The appellant was convicted of gross negligence manslaughter. He appealed against his conviction and sentence primarily on two grounds: the judge had misdirected the jury in relation to (i) breach of duty and (ii) causation. The appeal was dismissed; the judge’s directions were found to be good in law and thus the conviction safe; the sentence was not found to be manifestly excessive.

 

R Travis Green [2017] EWCA Crim 1774

The judgment, available here, was handed down by McCombe LJ sitting in the Court of Appeal on 07.11.17.

This was an appeal against the defendant’s conviction for an offence of indecent assault contrary to s.14(1) of the Sexual Offences Act 1956. The appeal was brought on three grounds; two concerned the judge’s directions to the jury and the third concerned the circumstances under which the jury reached their verdict. The appeal was allowed and the conviction quashed; the Crown’s application for a retrial was refused.

 

Krzysztof Bialon Regional Court of Bielsko-Biala, Poland [2017] EWHC 2766 (Admin)

Judgment, available here, was handed down by Mr Justice Dingemans sitting in the High Court (Administrative Division) on 08.11.17.

This was an appeal against an order for the extradition of the appellant. The appellant contended extradition should not be ordered because extradition would infringe his and his children’s Article 8 rights. The appeal was dismissed; the children’s rights had been given proper consideration and the judge was not wrong in the first instance to order surrender.

 

Radka Sesinova District Court in Most, Czech Republic [2017] EWHC 2755 (Admin)

Judgment, available here, was handed down by Sir Wyn Williams sitting in in the High Court on 07.11.17.

This was an appeal against the decision of District Judge Snow that the appellant should be extradited to the Czech Republic pursuant to an EAW. On appeal, the appellant contended that the EAW did not comply with s.2 of the Extradition Act 2003, which lays out certain formal requirements of an EAW. The appeal was dismissed as the EAW was found to comply with the s.2 requirements, as it was permissible that an earlier EAW be used to provide the particulars of the offence.

 

R Matthew Scully-Hicks, Cardiff Crown Court, 07.11.17, Sentencing Remarks of Mrs Justice Nicola Davies DBE

Matthew Scully-Hicks was sentenced to 18 years’ imprisonment for the murder of his adoptive daughter Elsie.

The full remarks are available here.

 

R Michael Richards and ors, Southwark Crown Court, 10.11.17, Sentencing Remarks of Mr Justice Edis

The five defendants in this case, after a lengthy trial  were convicted of conspiracy to cheat the Revenue. Three of the five were further convicted of a further substantive offence of cheating the Revenue.

The full remarks are available here.

 

In the news

UK prosecutors destroy Assange emails

 

Family of autistic woman killed in traffic accident demand coroner’s replacement

 

Facial recognition cameras used at Remembrance Sunday Service

 

ICJ could be without British judge for the first time since 1946

 

 

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6KBW
6KBW
6 November 2017

Weekly Digest: 6 November 2017

In this week’s Digest, the Supreme Court considered the obligation to provide rehabilitation during extended sentences and the Court of Appeal considered whether nitrous oxide is an ‘exempted substance’ for the purposes of the new Psychoactive Substances Act 2016.

Brown v The Parole Board for Scotland [2017] UKSC 69

Judgment handed down by Lord Reed in the Supreme Court on 1.11.17.

Concerning the issue of whether the under Article 5 of the European Convention on Human Rights to provide prisoners with a real opportunity for rehabilitation applies to prisoners serving extended sentences. Appeal dismissed, as the appellant had various opportunities for rehabilitation. The Supreme Court took the opportunity to align domestic law’s interpretation of article 5 with the interpretation of the European Court of Human Rights.

Littlewoods Ltd v Revenue and Customs Commissioners [2017] UKSC 70

Judgment handed down by Lord Reed and Lord Hodge in the Supreme Court on 1.11.17.

Concerning the issue of whether a common law claim for compound interest was excluded by sections 78 and 80 of the Value Added Tax Act 1994. If the appellant’s claim for compound interest was so excluded, whether this was contrary to EU law. Appeal dismissed and HMRC’s cross appeal allowed. The scheme created by section 78 was held to be inconsistent with the availability of concurrent common law claims to interest. In relation to the cross appeal, the CJEU has given member state courts a discretion to provide reasonable redress in the form of interest in addition to the principal sum.

 

Michalak v General Medical Council [2017] UKSC 71

Judgment handed down by Lord Kerr in the Supreme Court on 1.11.17.

Concerning the issue of whether the availability of judicial review proceedings in respect of decisions or actions of the GMC could properly be described as proceedings ‘in the nature of an appeal’ and, on that account, the jurisdiction of the Employment Tribunal is excluded by section 120(7) of the 2010 Act. Appeal dismissed. Judicial review is not in the nature of an appeal. Nor is it a remedy provided by reason of an enactment.

 

R (on the application of C) v Secretary of State for Work and Pensions [2017] UKSC 72

Judgment handed down by Baroness Hale PSC in the Supreme Court on 1.11.17.

Concerning the issue of whether certain policies adopted by the Department of Work and Pensions (DWP) in the administration of the welfare benefits system are, when applied to people with a reassigned gender, in breach of the Gender Recognition Act 2004 (‘the GRA’), the Human Rights Act 1998 (‘the HRA’) or the Equality Act 2010 (‘the EA’). Appeal dismissed. The policies complied with each statute.

 

R v Chapman [2017] EWCA Crim 1743

Judgment handed down by Lord Burnett CJ in the Court of Appeal (Criminal Division) on 1.11.17.

Concerning the issue of whether nitrous oxide is an ‘exempted substance’ for the purposes of the Psychoactive Substances Act 2016 because it is a ‘medicinal product’ within the meaning of that term as defined by the Human Medicines Regulations 2012 (S.I. 2012/1916). Appeals dismissed. The substance in question in the circumstances was intended for recreational, rather than medical, use.

Louis Mably QC appeared on behalf of the Crown

R v Lewis [2017] EWCA Crim 1734

Judgment handed down by Davis LJ in the Court of Appeal (Criminal Division) on 1.11.17.

Concerning the issue of whether the trial judge’s ruling that there was no case for the defendants to answer was a ruling that it was not reasonable for the judge to have made within the meaning of section 67 of the Criminal Justice Act 2003. Appeal dismissed. The evidence was insufficient for the case to pass half time.

Secretary of State for the Home Department v Onuorah [2017] EWCA Civ 1757

Judgment handed down by Singh LJ in the Court of Appeal (Civil Division) on 3.11.17.

Concerning the issue of whether the First-tier Tribunal and the Upper Tribunal had erred in law in finding that there was ‘family life’ or ‘private life’ for the purposes of article 8 of the European Convention on Human Rights between an adult and her brother, who lived in the UK. Appeal allowed. The term ‘family life’ did not encompass the relationship between the appellant and her brother.

Wright v Reading Crown Court [2017] EWHC 2643 (Admin)

Judgment handed down by Goose J in the Administrative Court on 31.10.17.

Concerning the issue of whether a person could commit an offence contrary to section 8(1)(h) of the Animal Welfare Act 2006 if he or she ‘kept or trained’ an animal for use in connection with animal fighting through an agent. Application refused. An individual could commit the offence if he or she retained control of the animal while it was elsewhere.

Marwaha v UK Border Agency (Cash and Compensation Team) [2017] EWHC 2321 (Admin)

Judgment handed down by Charles J in the Administrative Court on 2.11.17.

Concerning the issue of whether poppy heads and poppy stalks imported by the appellant for use in flower arrangements fell within the definition of ‘poppy straw’ in the Misuse of Drugs Act 1971. Appeal allowed. The Administrative Court held that the poppy heads were not mown for the purposes of the statutory definition.

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Cryptocurrency and restraint: police permitted to convert seized Bitcoins

The Crown Court has granted a novel application by the police in restraint proceedings to convert seized Bitcoins into sterling.

R v Teresko (Sergejs)

Kingston Crown Court: HHJ Lodder QC, 11 October 2017, unreported.

Surrey police searched the home address of the defendant who was subsequently convicted of drugs and money-laundering offences. A piece of paper was found containing a bitcoin recovery phrase, which enabled police to seize 295 bitcoin worth £975,000. Confiscation was outstanding. An application was made by the CPS for a restraint order over the defendant’s assets under s41 Proceeds of Crime Act 2002, including an application under s41(7) for an order permitting the police to ‘convert’ the 295 bitcoin into sterling, owing to the volatility of bitcoins, and their vulnerability to attack, even when held in a dedicated police bitcoin wallet. It was accepted that this was an entirely novel application. Evidence was adduced of two alternative methods for conversion of bitcoin: public auction, a method successfully used in the United States, and an bitcoin exchange, used by the Dutch police for over 5 years and subject to due diligence by UK law enforcement.

Held, the application was granted. The Court was satisfied that the power to make such an order was available under s41(7) POCA, and that it was appropriate to make the order. The appropriate means of conversion was the approved bitcoin exchange. The fees for undertaking the conversion were lower than those at public auction, and the effectiveness of using a bitcoin exchange had been established.

Commentary

Bitcoin and other cryptocurrency are widely used by lone criminals and organized crime groups to launder their proceeds, but law enforcement and the courts are only just beginning to consider the adequacy of existing powers. In the present case, the prosecutor was able to point to the wide power under s41(7) POCA which enables a court to make “…such order as it believes is appropriate for the purpose of ensuring that the restraint order is effective”. Long before the POCA legislation, the courts had recognized that they had a power to make ancillary orders in connection with restraint orders, in the same way that they did in connection with civil freezing orders (Re O [1991] 2 QB 520, applying AJ Behkor v Bilton [1981] 2 All.E.R. 565). Novelty has not been bar to the courts developing new types of ancillary orders in the civil context (Bayer v Winter [1986] 1 WLR 497, order requiring the surrender of a passport) and the need for flexibility to deal with “new situations” has been again reiterated by the Court of Appeal (JSC BTA Bank v Ablyazov [2014] 1 WLR 1414, overturned on other grounds). Nor is it an objection in principle that unlike most ancillary orders, the order in this case was not against the defendant (such as disclosure, repatriation) but was in favour of a third party, the police; there is precedent for ancillary orders being directed at third parties (as in (Re D (Restraint Order: Non Party), The Times, 26 January 1995, requiring disclosure by a non-defendant). Aside from objecting to the overall novelty of the situation, it could have been said that the police were not properly qualified to carry out a transaction of this nature and that a receiver was better placed to perform it. In the present case the CPS adduced evidence that considerable thought had been given to the best means of effecting conversion to sterling. The fact that a (costly) receiver might have been appointed did not mean that such an order was not permissible. Alternatively it might have been said that the value of bitcoin was bound to go up further (as it had since the original seizure) and therefore that the defendant would lose out. This argument had less force in a post-conviction case where the defendant, facing confiscation proceedings in which the assumptions would apply, was unlikely to retain any part of these assets, whatever happened to the value of bitcoin in the interim.

A further interesting aspect of this case, which was not an issue for the Crown Court, is the original seizure of the BitCoin by Surrey Police: this will be the subject of a further blogpost.

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Alex Du Sautoy
Alex Du Sautoy
27 October 2017

Landmark Supreme Court dishonesty ruling

The Supreme Court has overturned the long-standing Ghosh test for establishing dishonesty in criminal proceedings.

Case summary: Ivey v Genting Casinos (UK) Ltd t/a Crockfords [2017] UKSC 67

Background

The Appellant, Mr Ivey was a professional gambler who wished to sue the respondent company, an owner of casinos. In August 2012, Mr Ivey had deployed a technique called ‘edge-sorting’ when playing Punto Banco (a type of Baccarat) at one of the Respondent’s casinos. It was common ground that the technique had improved the Appellant’s chances and he had won £7.7 million over the course of a number of days. The casino declined to pay Mr Ivey the winnings, claiming that ‘edge sorting’ amounted to cheating. Mr Ivey’s claim was that it was not cheating but a legitimate technique.

It was uncontroversial throughout litigation that it was an implied term of the contract for betting between the parties that neither of them would cheat. To the extent Mr Ivey had cheated, he would have been in breach of that implied term and unable to recover his “winnings”.

At first instance, Irwin J found that Mr Ivey was a professional gambler who described himself as an “advantage player”, viz. one who, by a variety of techniques, sets out to reverse the advantage held by the house and to play at odds which favour him. The judge accepted that he was genuinely convinced that what he did was not cheating. The question arising, however, was not whether Mr Ivey thought of it as cheating, but whether it was as a matter of fact and law. The judge concluded that it was, and so did the majority of the Court of Appeal.

Judgment

Lord Hughes gave the unanimous judgment of the Court. It was found that the definition of cheating must be the same for the implied term as for section 42 of the Gaming Act 2005, which makes cheating at gambling an offence. The Supreme Court observed that certain forms of cheating do not involve dishonesty, just as certain forms of deception do not constitute cheating. The Court found that the judge’s conclusion, that Mr Ivey’s actions amounted to cheating, was unassailable, and that it was not necessary to make an additional finding on whether the conduct of Mr Ivey amounted to deception. Nonetheless, the Supreme Court went on to consider whether, if dishonesty were an essential element, such an additional element would be satisfied in this case.

Dishonesty test

The Supreme Court considered the leading authority of R v Ghosh [1982] QB 1053, and the directions to juries which have been derived from that case in determining whether there has been ‘dishonesty’ for the purpose of any offence, namely that a jury is to apply a two stage test:

  1. Was the conduct complained of dishonest by the standards of reasonable and honest people?
  2. If so, did the defendant realise that ordinary honest people would consider his behaviour to be dishonest?

The Supreme Court identified six problems with the second limb of the Ghosh test in particular:

  1. The more warped the defendant’s standards of dishonesty, the less likely it is that he will be convicted of dishonest behaviour. As it was put in Smith’s Law of Theft 9th ed (2007), para 2.296: “…the second limb allows the accused to escape liability where he has made a mistake of fact as to the contemporary standards of honesty. But why should that be an excuse?”
  2. The test is not necessary to preserve the principle that dishonesty, and especially criminal responsibility for it, must depend on the actual state of mind of the defendant. Innocent mistakes, such as genuinely believing that all public transport is free, are already covered by the first limb. In determining the honesty or otherwise of a person’s conduct, one must ask what the defendant knew or believed about the facts affecting the area of activity in which he was engaging.
  3. It is a test that jurors and others often find puzzling and difficult to apply.
  4. It has led to an unprincipled divergence between the test for dishonesty in criminal proceedings and the test for dishonesty in civil proceedings.
  5. It represented a significant departure from law before the Theft Act 1968, when there is no indication that such a change was intended.
  6. The decision was not compelled by authority. The better view of the pre-Ghosh cases is that the preponderance of authority favoured the simpler rule that, once the defendant’s state of knowledge and belief has been established, whether that state of mind was dishonest or not is to be determined by the application of the standards of the ordinary honest person.

The Supreme Court concluded that these considerations provide convincing grounds for holding that the second leg of the test does not correctly represent the law, and that directions based upon it ought no longer to be given. They held that the correct test of dishonesty is that set out by Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 and by Lord Hoffmann in Barlow Clowes International Ltd v Eurotrust International Ltd [2005] UKPC 37. The test to be applied by a jury in determining dishonesty should therefore be as follows:

  1. To ascertain the actual state of the defendant’s knowledge or belief as to the facts.
  2. Determine whether the conduct was honest or dishonest by applying the standards of ordinary decent people.

There is no requirement that the defendant must appreciate that what he has done is, by the standards of ordinary decent people, dishonest. If dishonesty were an additional legal element in cheating at gambling, the Supreme Court concluded, it would in this case have been satisfied by the application of this new test.

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