The Law Commission

PART V

THE ROLE OF DISHONESTY IN THE CRIMINAL LAW

The nature and meaning of dishonesty as a fault element

5.1      Dishonesty is a defining element of all the major Theft Act crimes, and conspiracy to defraud. It is, however, an unusual element, because it necessitates a moral as well as a factual enquiry.^[1] Traditionally, crimes consist of objectively defined conduct or events (external elements) and mental states (fault elements), subject to circumstances of justification or excuse (such as self-defence or duress). In general the fact-finders' task is (a) to determine what happened, (b) to determine what the defendant's state of mind was, and (c) to apply those facts to the definition of the crime in question, to see whether each of the external elements and fault elements have been made out. It is unusual for the fact-finders to be asked to decide whether they think the defendant's conduct or state of mind was sufficiently blameworthy for it to constitute a crime.

Is it possible to define dishonesty?

5.2      Legal definitions of "moral" elements, such as dishonesty, seem to be elusive. The case law on the meaning of these elements tends to offer structure or guidance rather than firm definitions. A parallel example can be found in the following consideration of the meaning of "gross negligence". For the purposes of manslaughter, Lord Hewart CJ said:

… the facts must be such that, in the opinion of the jury, the negligence of the accused went beyond a mere matter of compensation between subjects and showed such disregard for the life and safety or others as to amount to a crime against the State and conduct deserving punishment.^[2]

5.3      Thus "gross negligence" means negligence which is so gross that, in the opinion of the jury, it ought to be criminal. The jury are left to draw the line between criminal negligence and non-criminal negligence, and the law gives them no further guidance. In effect, "gross negligence" means what the fact-finders' understand it to mean.
5.4      Likewise, when fact-finders are asked to consider whether the defendant's conduct was or was not dishonest, the law does not provide them with a definition of the word. The fact finders draw the line, so that dishonesty means what they understand it to mean. As we discuss further at 5.12 below, this lack of definition has been criticised, but we are unaware of any proposed definitions which the law could adopt.
5.5      It may be that moral elements such as dishonesty can only be defined with reference to the fact-finders' judgement. Richard Tur argues that "what may constitute a just excuse is so context-dependent that exhaustive definition must necessarily limit the range of circumstances which might excuse".^[3] Therefore, if an exhaustive definition of "just excuse" or "dishonesty" were incorporated into the law, there would inevitably be examples of behaviour which were legally dishonest, but which the fact-finders would characterise as morally blameless.

The Ghosh approach

5.6      When dishonesty is a live issue, although the fact-finders are not given a definition, they are required to consider it in a structured way. The Court of Appeal in Ghosh^[4] laid down a two-stage test. The first question is whether the defendant's behaviour was dishonest by the ordinary standards of reasonable and honest people. If the answer is no, that is the end of the matter and the prosecution fails. If the answer is yes, then the second question is whether the defendant was aware that his or her conduct would be regarded as dishonest by reasonable, honest people.
5.7      While this approach provides structure, and prevents defendants from running "Robin Hood" defences, where the defendant acknowledges that his or her conduct would be regarded as dishonest by reasonable honest people, it still involves the jury drawing the line between what is and what is not dishonest. It is not, however, merely what the jury regards as the appropriate moral standard, by reference to their view of the ordinary standards of reasonable and honest people, which counts. In addition, the jury is required to find that the defendant recognised that his or her conduct was outside the norms of what society regards as honest.
5.8      Some academic critics argue that this approach must lead to inconsistency, such that the same set of facts could produce an acquittal in one court and a conviction in another.^[5] On the other hand, we are not aware of any research or evidence to show that verdicts are in fact significantly inconsistent when dishonesty is a live issue in a case.
5.9      There is some evidence that people's moral standards are surprisingly flexible. A MORI poll for the Sunday Times in October 1985^[6] found that only 35% of those questioned thought it morally wrong to accept payment in cash in order to evade liability for tax. On the other hand, it does not follow that the other 65%, if sitting on a jury in a case of tax evasion where dishonesty was in issue, would necessarily have acquitted. Indeed, the proportion of those questioned who thought that such conduct was morally acceptable to most people was only 37%. This may suggest that people do not generally assume that their own moral standards are the norm. Indeed it indicates that a majority of respondents thought that their own moral standards fell below those of most others.^[7]
5.10      It seems, therefore, that the first stage of the Ghosh test may not necessarily result in the jury simply applying their own standards of honesty. It may, indeed, be quite natural for fact-finders to form a view of what reasonable, honest, people would consider dishonest, as distinct from their decision reflecting their own personal moral view. This approach still leaves room for inconsistent verdicts, because fact-finders might have different views on what reasonable, honest people would categorise as dishonest. Nonetheless, there must be less inconsistency than if fact-finders were expressly required to apply their own moral standards.
5.11      The second limb imposes an important brake on what might, despite its express terms, tend to be a subjective approach to the first limb decision. First it prevents naive or innocent defendants from being found to be dishonest when the jury is not satisfied that they must have recognised that their behaviour fell outside the norms of reasonable honest people. On the other hand it operates as a brake on the jury acquitting by virtue of the "Robin Hood" defence.

What purpose does dishonesty serve as a defining element?

5.12      Some critics of the Ghosh approach have questioned whether dishonesty is a useful concept at all.^[8] Before answering this question, it is important to note a distinction between two ways that dishonesty can form part of the definition of an offence.^[9] In some crimes, such as conspiracy to defraud, the other elements of the offence are not prima facie unlawful, so dishonesty renders criminal otherwise lawful conduct. However, in deception offences the other elements of the offence, if proved, would normally be unlawful in themselves. If someone has practised a deception in order to gain a benefit their conduct is prima facie wrongful. Therefore dishonesty can be raised to rebut the inference that conduct was in fact wrongful. For ease of explanation, we will refer to the former type of crime as having a positive requirement of dishonesty, and the latter as having a negative requirement.^[10] It should be remembered, however, that even where dishonesty is a negative requirement, so that the issue is likely to be raised by the defence to rebut the Crown's case, the burden of proof remains with the Crown. Whenever dishonesty is in issue, the Crown must prove that the defendant was dishonest.
5.13      In Consultation Paper No 155, we provisionally concluded first, that it is wrong in principle to use dishonesty as a positive element;^[11] and second, that, for offences which require proof of deception, dishonesty could be more usefully be replaced by specific defences.^[12] We stand by the first of these provisional proposals, and expand on that recommendation in Part V. However, we no longer propose to dispose of dishonesty as a negative requirement in fraud offences. This change in view was prompted by the consultation process, and the overall change in our approach.
5.14      Some of the respondents to the Consultation Paper, such as the Magistrates' Association, felt that the requirement of Ghosh dishonesty was unproblematic. This was because they appeared to take the view that there are shared community values in relation to such concepts as dishonesty. Others felt that the combined wisdom of the members of the jury meant that the potential for inconsistency between different juries should not be overstated.
5.15      Other respondents took the view that juries from different areas of the country may have substantially different views on dishonesty, depending on the prevailing financial circumstances and political views of those living in the area. However, we would question whether it is at all sensible to project an apparent divergence, on the macro level, in economic circumstances and political preference between different areas of the country onto the likelihood of a divergence in views where the focus is a decision of 12 individuals who have been asked the specific question whether reasonable, honest people would consider certain behaviour to be dishonest. Even if there is the potential for a divergence of views on such a question, we are unaware of any evidence of it.
5.16      While in principle we are against a crime of fraud which would be based on Ghosh dishonesty as a positive element (see paragraphs 5.20 to 5.22 below), we accept that in cases where the defendant's conduct is prima facie fraudulent, there is a need to ensure that those who most people would consider morally blameless are not found guilty. We have also concluded that it would not be possible to define dishonesty exhaustively while still achieving this result.
5.17      In Consultation Paper No 155, which is discussed in Part VI below, we suggested that dishonesty could be replaced with specific defences. This proposal met with considerable opposition, and we now concede that specific defences would not be able to cover every situation where apparently fraudulent behaviour may have been justified. We have come to agree with the argument put forward by Richard Tur, cited at paragraph 5.5 above.
5.18      The fact that Ghosh dishonesty leaves open a possibility of variance between cases with essentially similar facts is, in our judgment, a theoretical risk. Many years after its adoption, the Ghosh test remains, in practice, unproblematic. We also recognise the fact that the concept of dishonesty is now required in a very large number of criminal cases,^[13] so to reject it at this stage would have a far-reaching effect on the criminal justice system.
5.19      We have therefore concluded that dishonesty should be a negative element in any crime of fraud, so that where other elements of the crime can be proved, a lack of dishonesty will nonetheless be a defence. However, for reasons which we set out below, we do not consider it right that dishonesty should be the key, positive element in a fraud offence. It should be a necessary element of the offence, but it should not be sufficient.

Would a general dishonesty offence be desirable?

5.20      In Part V of Consultation Paper No 155 we provisionally concluded that a general dishonesty offence, in which dishonesty would be a positive rather than a negative element, was objectionable in principle. (Conspiracy to defraud is an example of a general dishonesty offence, and at paragraphs 3.6 to 3.9 above we cite this as one of our main reasons for proposing its abolition.)
5.21      41 respondents broadly agreed with this conclusion, and only nine disagreed.^[14] We take this as strong confirmation of the Consultation Paper's provisional view. The debate between those respondents who agreed and those who disagreed centred on differing judgments as to the appropriate balance between the advantages of flexibility and the disadvantages of uncertainty. This might be characterised as a debate between those, on the one hand, supporting the enhancement of efficiency in having a broad offence and, on the other, those favouring the enhancement of justice in formulating offences reflecting legal certainty and consistency on the other. One of our respondents anticipated that this would be the nature of the dispute because, in his words:

Ever since the abolition of the Star Chamber and the adoption of its jurisdiction by the common law courts, there has been a struggle between prosecutors who like to sweep everyone under a broad loosely defined offence, since that gives them maximum flexibility to meet the unexpected, and defenders who want precise offences in the hope that the prosecutor will pick the wrong charge. I describe both in pejorative terms, though obviously each approach could be described more positively. The whole impetus of the common law was and ought to be towards precise offences to protect the liberty of the subject.

5.22      This prediction was, to some extent, borne out in the consultation process in that both the Crown Prosecution Service and the Serious Fraud Office argued in favour of a general dishonesty offence, principally on the basis that it would offer greater flexibility.

The arguments for a general dishonesty offence

5.23      The Crown Prosecution Service favoured the creation of a general offence of fraud based on dishonesty "because of the flexibility it would offer in prosecuting fraud cases" and "because it would cover situations where deceit is not used to commit the fraud, or where it is difficult to establish a link between the deception and the outcome or intended outcome." It argued that flexibility was crucial given the developments in financial markets and the increasing use of new technologies. It further argued that complicated and technical legal arguments could be avoided by a general offence and that clarifying issues might help to simplify complex fraud trials.
5.24      The Serious Fraud Office felt that the unresolved problems of internet fraud, where the fraud consisted of enjoyment of a service delivered over the internet which had legitimately been paid for by another, and fraud in financial markets, specifically Eurobond fraud, highlighted the complexity of modern financial practices. It felt that the speed at which such practices were changing and developing showed "the need for extreme flexibility in the relevant criminal law". The Department of Trade and Industry expressly agreed with the views of the CPS and the SFO.

The arguments against a general dishonesty offence

Legal certainty and fair warning

5.25      An offence which is defined only by fact-finders' moral opinions would necessarily be uncertain. Such an offence infringes, by a margin, the key principles of maximum (not absolute) certainty and fair warning and thus, the principle of legality. As Professor Andrew Ashworth has put it:

A vague law may in practice operate retroactively, since no one is quite sure whether given conduct is within or outside the rule. … [R]espect for the citizen as a rational, autonomous individual and as a person with social and political duties requires fair warning of the criminal law's provisions and no undue difficulty in ascertaining them.^[15]

5.26      The CPS rejected our arguments in Consultation Paper No 155 that a general offence of fraud would be too subjective and uncertain. It did not accept the distinction between dishonesty as the sole defining element of a general offence of fraud and dishonesty as a single element of a more specific offence. The CPS also argued that the proposition that a widely drawn offence will cause uncertainty ignores the fact that a prosecution is only brought if a case passes the evidential and public interest tests under the Code for Crown Prosecutors. It pointed out that the prosecution must adduce evidence of improper and dishonest conduct on the part of the defendants – such as evidence of untruthfulness, concealment of dealings, failure to disclose material information etc. It said that if such evidence is not available it is unlikely that a case will pass the evidential test of the Code. For this reason, it did not accept that there was any appreciable danger of people being unfairly prosecuted for that which they did not know to be dishonest.
5.27      We can see the force of the argument that a person should be charged with a criminal offence involving dishonesty only where there is evidence of improper or morally dubious conduct and that the person acted dishonestly. Where we part company with the CPS is that we believe that the requirement of morally dubious conduct should be embedded in the definition of the offence, and not left to the good sense of the prosecution in screening the cases which should be charged or pursued to trial.
5.28      We continue to believe that a general dishonesty offence, by not requiring as an element some identifiable morally dubious conduct to which the test of dishonesty may be applied, would fail to provide any meaningful guidance on the scope of the criminal law and the conduct which may be lawfully pursued. We do not accept the argument that inherent uncertainty is satisfactorily cured by the promise of prosecutorial discretion. This cannot make a vague offence clear and, while it might ameliorate some of the risks, it does not excuse a law reform agency from formulating a justifiable and properly defined offence. We do not believe it is for the police and prosecutors to decide the ambit of the criminal law. As the Supreme Court of the United States has said:

A statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application, violates the first essential of due process of law.^[16]

Human rights

5.29      The principle of maximum certainty is now linked to the question of compatibility with the Human Rights Act 1998. Article 7 of the European Convention on Human Rights^[17] states:

No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed.^[18]

5.30      In Consultation Paper No 155 we doubted that a general dishonesty offence could safely be declared compatible with this provision. As Professor Ashworth pointed out in the passage quoted at 5.25 above, uncertain laws may have retroactive effect. We argued that the scope of a general dishonesty offence would be uncertain, and therefore it could be in breach of article 7.
5.31      A number of consultees who were opposed to the creation of a general dishonesty offence agreed with our doubts as to its compatibility.^[19] However, those who agreed with us tended, if they elucidated further, to qualify their agreement by suggesting that the issue was not a straightforward one, and that the possible lack of compatibility should not create an automatic bar to discussion and consideration.
5.32      Those who did not consider that such an offence would necessarily be incompatible included respondents who were nevertheless against the creation of a general dishonesty offence, as well as those who were in favour. Other jurisdictions, whose general fraud offences had not been held to violate their Bills of Rights,^[20] were cited in support of this point of view, and several consultees pointed out that the Strasbourg jurisprudence has shown tolerance towards a number of offences, which could be considered imprecise or uncertain.^[21] Many of these respondents also considered that its importance should not be overemphasised, nor simply used to "bolster" arguments.
5.33      In the light of these responses, we take the view that general dishonesty offences (such as conspiracy to defraud) could perhaps be found to be compatible with the requirements of article 7. We nonetheless remain of the view that they offend against the principle of maximum certainty.

Fair labelling

5.34      Professor Ashworth has described how "fair labelling" of crimes is an important, if unacknowledged, feature of the criminal justice system:

Its concern is to see that widely felt distinctions between kinds of offences and degrees of wrongdoing are respected and signalled by the law, and that offences are subdivided and labelled so as to represent fairly the nature and magnitude of the law-breaking. …

Fairness demands that offenders be labelled and punished in proportion to their wrongdoing; the label is important both in public terms and in the criminal justice system, for deciding on appropriate maximum penalties, for evaluating previous convictions, classification in prison, and so on. …

The strength of the principle is to ensure that arguments of proportionality, fairness to individuals, and the proper confinement of executive and judicial discretion are taken seriously when new offences with broad definitions and high maximum penalties are under consideration.^[22]

5.35      We take the view that a general dishonesty offence would pay insufficient regard to the principle of fair labelling. It would not explain or reflect to society the nature of the wrongdoing or its scale of harm. The law in this area would lose its educative and declaratory functions.

Effect on other dishonesty offences

5.36      The practical consequence of the inroads into the principles of fair warning and fair labelling can be seen by the potential effect on other dishonesty offences. The widespread use of a general dishonesty offence would render largely academic the boundaries of all other offences of dishonesty. Where a person's conduct fell outside a particular offence because of the specific requirements that Parliament has thought appropriate for that offence, the prosecution would be able to circumvent the difficulty by charging the general dishonesty offence instead. For example, the receipt of stolen goods is not an offence under section 22 of the 1968 Act unless the receiver knows or believes them to be stolen. But some people would say it is dishonest to receive goods which one suspects to be stolen. The prosecution could therefore invite the fact-finders to convict a receiver of the general dishonesty offence without being satisfied of the knowledge or belief that the 1968 Act expressly requires.
5.37      Similarly, legislation such as the Companies Acts 1985 and 1989, the Insolvency Act 1986 and the Financial Services Act 1986 provide comprehensive regulatory codes in their respective areas, which include numerous specific criminal offences. These are essential for people in the commercial sphere to know what they can and cannot do. The distinctions between these offences, and between them and more general, mainstream criminal offences, would be obliterated by a general dishonesty offence. The same could be said of many other offences. The effect of a general dishonesty offence would be to widen every dishonesty offence, dramatically and indiscriminately; and we believe that this would be wrong.

Is dishonesty criminal?

5.38      In Consultation Paper No 155, we argued that the case for a general dishonesty offence had to rest on the argument that all dishonest conduct should in principle be criminal.^[23] There would be no logical reason to attach criminal sanctions to every form of dishonesty for commercial gain, while giving complete licence to those who use dishonesty for political, emotional, social or sexual gains. On the other hand, if all dishonesty were to be criminalised, it would offend against the principle of minimum criminalisation. People across the jurisdiction tell small lies every day. This will often rightly result in social retribution, but such instances of dishonesty cannot be properly described as criminal. It is simply not appropriate to extend the scope of the criminal law to cover every minor social problem or instance of human frailty. A general dishonesty offence would be based on principles which, if taken to their logical conclusion, would trivialise the law and extend its scope too far.

Discretion

5.39      Ultimately, as we have explained above, we do not accept the CPS view that a general dishonesty offence would be rendered certain and fair by the benign application of prosecutorial discretion. An offence as broad as a general dishonesty offence would necessarily demand that prosecution services would be called upon to exercise their discretion in an increasing number of cases. This must raise concerns about consistency, and prosecutorial discretion leaving "the boundaries of the criminal law in a distinctly uncertain state".^[24]
5.40      This is no mere academic concern. Both ILEX and the Justices' Clerks' Society were cautious about prosecutorial discretion. They stated that it creates concern for the victims of crime, the accused and the police. It is notable that those who expressed the strongest reservations about prosecutorial discretion are those who have to deal with the impact of it in relation to minor offences on a regular basis. If a general dishonesty offence were introduced, it would replace the current deception offences, and therefore it would be used on a daily basis in Magistrates' Courts across the country. Its uncertain scope could have a highly deleterious effect on the ability to dispense summary justice in a fair and consistent manner.

The role of the jury (and other fact-finders)

5.41      One of our consultation respondents offered the thought that to ask the jury whether conduct ought to be criminal was to ask the wrong thing of it, as the jury is a fact-finding institution which tries only one case. He focused on the difficulties caused by jury psychology when considering vague notions such as dishonesty. He felt that a general dishonesty offence could lead to the frequent acquittal of those who ought to be convicted because the jury could not cope with the decision being asked of it.^[25]
5.42      In the absence of research, this argument cannot be established. It is clear, however, that where dishonesty is a live issue, the fact-finders must decide what dishonesty means. If the crime in question is a general dishonesty offence, with dishonesty as a positive requirement, this is a heavy burden. In effect the fact-finders are being asked to determine the scope of the crime in question, rather than simply determining whether the defendant committed the crime.
5.43      It may be that Hughes J is correct in saying that juries cannot cope with this function, and that they will be more likely to acquit in default of coming to a resolution. However, that is, perhaps, secondary to the fact that they should not be asked to set the boundaries of the criminal law. The same applies to any other fact-finding tribunal. As a law reform commission, it is our role to recommend where the boundaries of the criminal law should lie, and it is then for Parliament to set them. Where the facts of a certain case result in uncertainty, it should be for the judge or the magistrates (performing their legal function) to make a reasoned decision on whether the case falls on one side or the other. Importantly, such a decision is subject to appeal, whereas a decision of the fact-finders is not.
5.44      It is worth noting in this context that dishonesty need not be an issue that requires the fact-finders to set the boundaries of the law. That only occurs when dishonesty is a positive requirement which draws the boundary between wrongful and legitimate conduct. If dishonesty is a negative requirement, because the conduct is prima facie wrongful, it becomes a question of intent: was the defendant aware that the conduct was wrongful?

Other jurisdictions

Canada

5.45      The Canadian Criminal Code contains a general offence of fraud in section 380. This provides:

Every one who, by deceit, falsehood or other fraudulent means, whether or not it is a false pretence within the meaning of this Act, defrauds the public or any person, whether ascertained or not, of any property, money or valuable security or any service… is guilty of an indictable offence…

5.46      The phrase "or other fraudulent means" has been very widely interpreted. The leading case on section 380 is Olan^[26]. The Supreme Court of Canada held that the essential elements of the offence were deprivation in the sense of economic prejudice, or risk of such prejudice, and dishonesty. Thus section 380 has become a general dishonesty offence, because dishonesty is the sole element which distinguishes wrongful behaviour from lawful behaviour.
5.47      However, in 1987, the Law Reform Commission of Canada published a wide-ranging report, Recodifying Criminal Law. It recommended replacing section 380 with a new fraud offence. While the Commission remained in favour of a general fraud offence - that is a single offence which would capture all or most forms of fraudulent behaviour - they sought to provide further definitional elements, so that the offence would not be merely a general dishonesty offence. Two alternatives were put forward:

Everyone commits a crime who dishonestly, by false representation or by non-disclosure, induces another person to suffer an economic loss or risk thereof.

or

Everyone commits a crime who, without any right to do so, by dishonest representation or dishonest non-disclosure induces another person to suffer an economic loss or risk thereof.

5.48      For either alternative, a representation would be defined as relating to a matter of fact either past or present; and non-disclosure would relate to misrepresentation by omission where there was a duty to disclose arising from a special confidential relationship or a duty to correct a false impression created by, or on behalf of, the defendant.^[27]
5.49      These alternatives are not general dishonesty offences. They seek to ensure that the prohibited behaviour is prima facie wrongful. Thus dishonesty would be an additional element, rather than the sole element which defines criminal behaviour. Nonetheless, nothing has come of this recommendation, so Canada still has a general dishonesty offence.

Hong Kong and New Zealand

5.50      Hong Kong and New Zealand both have offences of conspiracy to defraud. They exist in these jurisdictions in much the same form as the common law offence does in England and Wales, although New Zealand has a statutory definition of the offence.^[28] As we have said in paragraph 5.20 above, conspiracy to defraud is, in effect, a general dishonesty offence. The Law Reform Commission of Hong Kong considered it in 1988.^[29] Their report came to the conclusion that it should be replaced by a general deception offence.
5.51      A general deception offence seeks to capture all deceptive conduct in one offence. Such offences cannot be described as general dishonesty offences, because deception is prima facie wrongful, and thus dishonesty is not left as the sole factor defining wrongful conduct. On the other hand, a general deception offence is not necessarily a general fraud offence. On one view, deception is only one way of committing fraud. (We investigate the relationship between deception and fraud in Parts III and IV above.)
5.52      The original legislation based on the Hong Kong Commission's report lapsed during the change of sovereignty in Hong Kong. New legislation was introduced in 1998, which included the new general deception offence, but it also retained conspiracy to defraud, despite the Commission's recommendation.^[30] Thus Hong Kong has both a general deception offence and a general dishonesty offence.
5.53      There have been similar efforts made to reform conspiracy to defraud in New Zealand. In 1991 the Crimes Consultative Committee examined the Crimes Bill 1989, which had been introduced by the Government to clarify and modernise the offence of conspiracy to defraud. The Committee recommended that the offence should be redrafted to cover cases of deception only, so that dishonesty alone would not be sufficient.^[31] Meanwhile, however, the Bill lapsed, so conspiracy to defraud remains unamended.^[32] Thus New Zealand still has a general dishonesty offence.

Other common law jurisdictions

5.54      We have not found any other examples of general dishonesty offences in common law jurisdictions. There are examples of general fraud offences, but these have a definition of wrongful conduct embedded within them, so that dishonesty is not the sole element which distinguishes lawful conduct from criminal conduct. For example, Scotland has a general deception offence,^[33] and the USA Model Penal Code^[34] has a crime of theft by deception.^[35]
5.55      These general fraud offences define deception more broadly than it has been interpreted in the context of the Theft Acts 1968 and 1978. In Scotland, for example, there is no need to prove that someone was in fact deceived, so long as there is a causal link between the false pretence and the resulting loss, gain or prejudice.^[36] Nonetheless, these elements of the crime ensure that the defendant's behaviour was prima facie wrongful, before the question of dishonesty is considered.

Summary

5.56      It seems, therefore, that a number of common law jurisdictions have general fraud offences, but only three have general dishonesty offences. In each of those three jurisdictions, law reform commissions have recommended repealing the general dishonesty offence in favour of a more closely-defined fraud offence.

Conclusion

5.77      In light of the above arguments, we stand by our provisional decision not to propose a general dishonesty offence. Dishonesty should only function as a negative element to rebut the prima facie criminality of the defendant's conduct.

Note 1    Professor Griew, in “Dishonesty: the Objections to Feely andGhosh” [1985] Crim LR 341, 346 makes the point that many jurors (“ordinary dishonest jurors” – his criticism A6) may demand of defendants a higher standard than they impose on themselves in their ordinary, mildly dishonest, everyday lives. This, he argues, is disreputable “creative hypocrisy”. It does not undermine our point: a hypocritical judgment is necessarily also a moral judgment (albeit a flawed one).    [Back]

Note 2    Bateman (1925) 19 Cr App R 8, 11 – 12.    [Back]

Note 3    “Dishonesty and the Jury” in AP Griffiths ed, Philosophy and Practice (1985) p 75.    [Back]

Note 4    [1982] QB 1053.    [Back]

Note 5    Eg E Griew, “Dishonesty: Objections to Feely andGhosh” [1985] Crim LR 341.    [Back]

Note 6    Cited by M Levi, Regulating Fraud: White-collar Crime And The Criminal Process (1987) p 65.    [Back]

Note 7    However, we are reluctant to draw firm conclusions from this survey without having seen it in full. It may be that the apparent disparity between the two findings was the result of confused questioning.    [Back]

Note 8    Eg D W Elliott, “Dishonesty in Theft: A Dispensable Concept” [1982] Crim LR 395.    [Back]

Note 9    See Consultation Paper No 155, paras 3.12 – 3.17.    [Back]

Note 10    Another way of looking at this distinction is to categorise the former cases as those which require dishonesty as part of the actus reus, and the latter as those which merely require mens rea dishonesty. Where dishonesty is an actus reus requirement, it is necessary for the Crown to show that the other elements of the actus reus, which would otherwise be lawful, were unlawful because dishonest. Where it is merely a mens rea requirement this is not necessary because the other elements of the actus reus ensure that the conduct is already prima facie unlawful. It can therefore be easily inferred that they are also dishonest, as a matter of mens rea, unless there is evidence to suggest the contrary.    [Back]

Note 11    Para 5.32.    [Back]

Note 12    Paras 7.39 – 7.53.    [Back]

Note 13    Andrew Ashworth estimates about a half of those tried on indictment: Ashworth on Criminal Law p 396.    [Back]

Note 14    Another two respondents discussed the point, but it is not clear whether they agreed.    [Back]

Note 15    Ashworth on Criminal Law pp 76 – 77.    [Back]

Note 16    Conally v General Construction Co 269 US 385, 391 (1926).    [Back]

Note 17    Schedule 1 to the Act.    [Back]

Note 18    Paragraph (2) preserves retrospective effect in respect of the trial and punishment of crimes against humanity and war crimes.    [Back]

Note 19    20 respondents agreed with us that the offence may be incompatible and 12 disagreed.    [Back]

Note 20    It should be remembered, however, that a general fraud offence need not be a general dishonesty offence. General dishonesty offences use the concept of dishonesty as the sole defining factor which separates lawful conduct from criminal conduct. It is, however, perfectly possible to employ other defining elements in a general fraud offence, so that the defendant’s conduct must be prima facie wrongful, before one considers the issue of dishonesty. As one of our respondents pointed out to us, Hong Kong and Scotland both have general fraud offences, and both have been found to be compatible with their respective Bills of Rights. However, neither of these general fraud offences were general dishonesty offences. See paragraphs 5.45 to 5.56 below, for a discussion of the general fraud and dishonesty offences employed in other jurisdictions.     [Back]

Note 21    The obscenity laws were given as examples by several respondents. In further support of the high threshold required before a law will be declared too uncertain to be incompatible, several cases were cited by respondents: Sunday Times v UK [1979] 2 EHRR 245, Steel v UK 23 Sept 1998, SW and CR v UK [1995] 21 EHRR 363, Handyside v UK [1976] 1 EHRR 737, Kokkinakis v Greece [1993] 17 EHRR 397.    [Back]

Note 22    Ashworth on Criminal Law pp 90 – 93.    [Back]

Note 23    Consultation Paper No 155, para 4.35.    [Back]

Note 24    Ashworth on Criminal Law p 422.    [Back]

Note 25    It might be said in reply that this is a risk which the prosecution would have to consider when deciding whether to charge such an offence. Similarly one of our respondents argued that a general dishonesty offence would lead to a considerable increase in the number of trials, because many defendants would always believe that it was worth running the imprecise defence of “not dishonest”.    [Back]

Note 26    (1978) 41 CCC (2d) 145.    [Back]

Note 27    Law Reform Commission of Canada, Recodifying Criminal Law (Report 31, 1987)pp 77 – 81.    [Back]

Note 28    Crimes Act 1961, s 257.    [Back]

Note 29    The Hong Kong report.    [Back]

Note 30    Stuart M I Stoker, Secretary of the Law Reform Commission of Hong Kong, provided an analysis of the legislative process which followed the publication of the Hong Kong report.    [Back]

Note 31    Crimes Bill 1989: Report of the Crimes Consultative Committee (1991) p 109, quoted in the Hong Kong report, p 46.    [Back]

Note 32    Crimes Act 1961, s 257.    [Back]

Note 33    This is a common law offence, which was strongly commended by the House of Lords in Preddy [1996] 1 AC 815, 830-831, per Lord Goff of Chieveley; and 841, per Lord Jauncey of Tulichettle.    [Back]

Note 34    Adopted by the American Law Institute in 1962.    [Back]

Note 35    Article 223.3.    [Back]

Note 36    R A A McCall Smith and David Sheldon, Scots Criminal Law (1992) p 242.    [Back]