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Civil Fraud – revisiting Ivey v Genting Casinos (UK) Ltd (2017) (5 March 2020)

Date: 05/03/2020
Duncan Lewis, Legal News Solicitors, Civil Fraud – revisiting Ivey v Genting Casinos (UK) Ltd (2017)

Have you been a victim of fraud?

If you are a victim of fraud and have lodged a police report and complaint with Action Fraud, you may feel as though you have been waiting ever since for some good news.

You might have to wait a little longer.

Police can only pursue a criminal prosecution if they have sufficient evidence to bring a criminal action (to prove beyond reasonable doubt) against the perpetrator and - most importantly - if they can actually locate the perpetrator.

In either case you would not be able to recover your actual loss or damages. If you wish to recover damages either against the perpetrator or an affiliated organisation like a bank, mobile provider or other financial institution that may be responsible for your loss, you can bring a civil action against one or more parties; which is sometimes known as civil fraud.


What amounts to civil fraud?

Fraud can take many forms. The Fraud Act 2006 defines fraud to include false representations, fraud by failing to disclose information, and fraud by abuse of position.

Fraud by false representation

A person is in breach of committing a fraud by false representations if he - (a) dishonestly makes a false representation, and (b) intends, by making the representation -


  • to make a gain for himself or another, or

  • to cause loss to another or to expose another to a risk of loss.


This can include deliberate misrepresentation; deception or dishonesty; economic tort of conspiracy or procuring breach of contract; knowing receipt and dishonest assistance; wrongful or fraudulent trading; and sometimes breach of fiduciary duties by directors. Dishonesty is not a prerequisite and much will depend on the nature of the claim and its circumstances.

In civil proceedings, the standard of proof is ‘on the balance of probabilities’. That is proof which relies on the relevant facts having a greater probability of occurring than not. Whereas in criminal proceedings, the burden and standard of proof should be proved —‘beyond reasonable doubt.’


The test for dishonesty

In the landmark case of Ivey v Genting Casinos (UK) Ltd (trading as Crockfords) [2017] UKSC 67, the Supreme Court set out the test for dishonesty in civil claims (and criminal cases). The court declared that the test from R v Ghosh [1982] QB 1053 ([1982] 2 All ER 689) should no longer be used when directing a jury on dishonesty. In a resounding judgment by the Lords, the court held that the case of Ghosh, used for decades to define dishonesty in criminal matters did not in fact correctly represent the test for “dishonesty”.

The Lords seemed to revert back to the realistic view that there is a consensus about what is honest and what is dishonest –a shared moral standard in society. The Ghosh test appeared to require an extra element of cynicism in a “dishonest” person.

The two-limbed Ghosh test required: (1) juries to decide whether a defendant’s behaviour was dishonest by the standards of reasonable honest people, and (2) whether he or she knew that the behaviour was dishonest by those standards.

It was held that although the great majority of cheating would involve something that the ordinary person would describe as dishonest, it was not invariably so.

The Supreme Court found the second limb of the Ghosh test to be confusing and that it did not correctly represent the law.
Lord Hughes held:

‘Where it applies as an element of a criminal charge, dishonesty is by no means a defined concept. On the contrary, like the elephant, it is characterised more by recognition when encountered than by description.’

He went on to further state:

‘These several considerations provide convincing grounds for holding that the second leg of the test propounded in Ghosh does not correctly represent the law and that directions based upon it ought no longer to be given…when dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence…(often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to the facts is established, the question of whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.’

To this end juries should now ascertain:

  1. the defendant’s actual state of mind or belief at the time of the alleged dishonest behaviour (including were the beliefs genuinely held) – subjective test; and

  2. was the conduct honest or dishonest by the standards of ordinary, decent people -objective test.


Whatever the circumstances, it is important to appreciate the test you will have to overcome in a civil claim for fraud. If you have suffered fraud via a bank or other financial institution you may have a direct claim for their breach of duty in tort or contract.


For advice on this, or any other litigation matter, contact commercial litigation director Sobashni De Silva on 020 3114 1180, or sobashnis@duncanlewis.com.

Author, Sobashni De Silva, is a director in the commercial litigation department at Duncan Lewis with over 12 years’ experience dealing with complex and high value litigation. She litigates across a broad range of areas such as those involving civil fraud, banking and finance disputes, professional negligence, defamation, contractual disputes, and international cross-border litigation.

She has extensive experience in the high court and the county courts litigating numerous matters including international jurisdictions.



Duncan Lewis Commercial and Civil Litigation Solicitors

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