Case Update: Clarity urgently required on the test for dishonesty in regulatory proceedings as Administrative Court unable to rule on the issue

28 May 2015

Kirschner v General Dental Council [2015] EWHC 1377

Judgement Date: 19 May 2015

Further to the cases of PSA v HCPC and David [2014] EWHC 4657 and Hussain v GMC [2014] EWCA Civ 2246, additional judicial comment has been made about the appropriate test for dishonesty in regulatory proceedings in the instant case.


The appellant dentist (K) appealed against the decision of the Professional Conduct Committee (PCC) of the respondent General Dental Council (GDC).
K was charged with 110 separate charges.  Most of these charges were of clinical deficiencies or mismanagement, however there were also two groups of allegations that accused the appellant of dishonesty.  The case was heard by the PCC over 12 days in 2014.  K was found guilty of a number of clinical deficiencies and of failing to cooperate and she did not challenge these findings.  She was however found guilty of the second group of dishonesty allegations, namely that she had claimed for payments under her NHS dental contract of £48 for three child patients, a total of £144.  She was suspended for a year for this charge.  It was this finding that was the subject of the appeal.

The state of the law

Mostyn J, over several detailed paragraphs of the judgement, grapples with the question ‘what is the legal test for dishonesty in disciplinary proceedings such as these’?  He states that:

Disciplinary proceedings have many hallmarks of criminal proceedings in that they may result in severe, even draconian, sanctions being meted out which can have a devastating effect on the professional's career and reputation. But they are civil proceedings nonetheless. And it is to state the obvious that in mainstream civil proceedings heard, say, in the Chancery Division or the Commercial Court, a finding of dishonesty and an award of heavy damages and costs can have an equivalently dramatic effect on a person's economy and reputation. So it would be a surprising state of affairs if there were a different legal test for dishonesty in disciplinary proceedings on the one hand, and mainstream civil proceedings on the other. Yet that appears to be the position that the law is in, and it would seem that it would be possible for a professional person to be found guilty of dishonesty in civil proceedings and to suffer heavy damages and costs but later, on the very same facts, to be found not guilty of dishonesty in disciplinary proceedings. That is (to put it mildly) an unhappy state of affairs. In my opinion the position needs to be conclusively clarified by the higher appellate courts or by legislation.[9]

Mostyn J  then outlines the history of the law on this issue. The House of Lords in Twinsectra Limited v Yardley and others [2002] UKHL 12 adopted a mixed or combined test of objectivity and subjectivity in line with the criminal definition propounded in R v Ghosh [1982] QB 1053, namely that dishonesty requires knowledge by the defendant that what he was doing would be regarded as dishonest by honest people, although he should not escape a finding of dishonesty because he sets his own standards of honesty and does not regard as dishonest what he knows would offend the normally accepted standards of honest conduct. 

This clear test was then significantly modified by the decision of the Privy Council in Barlow Clowes International Ltd v Eurotrust International Ltd [2005] UKPC 37 in which Lord Hoffman stated that ‘although a dishonest state of mind is a subjective mental state, the standard by which the law determines whether it is dishonest is objective.  If by ordinary standards a defendant’s mental state would be characterised as dishonest, it is irrelevant that the defendant judges by a different standards’. 

In the case of Abou-Rahmah v Al-Haji Abdul Kadir Abacha [2006] EWCA Civ 1492, the Court of Appeal accepted that this revised Barlow Clowes test applied in English civil proceedings.  This revised test was recently applied in Central Bank of Equador v Conticorp SA [2015] UKPC 11

Mostyn J noted however that despite this binding authority in 2006 and despite the fact that this Barlow Clowes test is that which is used by the civil courts routinely when adjudicating dishonesty allegations, this test has not been applied in the species of civil proceedings that is a disciplinary or regulatory process.  In those cases, the Twinsectra/Ghosh test has continued to be invariably applied.  The only cases in which the Court grappled with the Barlow Clowes development was Bryant v Law Society [2009] 1 WLR 163 and PSA v HCPC and David [2014] EWHC 4657).   In PSA v HCPC and David Popplewell J acknowledged that there were two different tests available but proceeded on the basis of Twinsectra/Ghosh in the absence of argument to the contrary (having expressed his disquiet as to this).  In Bryant the Court found that it was bound by the decision of Bultitude v The Law Society [2004] EWCA Civ 1853, and that this Court of Appeal decision stood as binding authority that the test to be applied in the context of solicitors disciplinary proceedings is the Twinsectra test as it was widely understood before Barlow Clowes, that is a test which includes the separate subjective elements.   The Court in Bryant found that there were ‘strong reasons’ for adopting such a test in the disciplinary context and for declining to follow the approach in Barlow Clowes, as regulatory proceedings should be more closely aligned with the criminal test.  

Mostyn J opines that the decision in Bryant was not correct as the Bultitude decision had been overruled by the Court of Appeal decision in Barlow Clowes.  He goes on to conclude that:

In my opinion there should be but one test for dishonesty in all civil proceedings, whatever their nature.  That test should be the one propounded by the Privy Council in Barlow Clowes and as it was very recently confirmed by it in Central Bank of Ecuador.  The Privy Council is the Supreme Court in all but name, and if it propounds a legal test then we should faithfully follow it unless it conflicts with an earlier binding domestic decision’. [19]

Under the Barlow Clowes test the only relevant mental state of a defendant charged with dishonesty in civil proceedings is his or her knowledge.  Once the knowledge of the defendant has been established it is then for the tribunal to act as the spokesman of the fair and reasonable man, who represents after all no more than the anthropomorphic conception of justice…and to determine if the defendant, possessed of that knowledge, and having engaged in the transactions in question, was dishonesty by ordinary standards.  Ordinary standards mean general ordinary standards and no the standards of the class or cohort from which the defendant happens to come, although it is hard to see that they would or could be different.[20]

Of course, if the Barlow Clowes test were adopted for disciplinary proceedings the tribunal may conclude on the evidence that a defendant accused of dishonesty was actually aware that what he was doing was wrong but such a finding would not be necessary to establish dishonesty.  The presence or absence of such awareness would however be highly relevant in the sanctions phase of the proceedings.  [21].

Despite all of the above, Mostyn goes on to say that it would a ‘step too far’ for him to hold that Bryant does not represent the law concerning dishonesty in disciplinary proceedings or that Twinsectra/Ghosh has not been adapted as suggested in Hussein.  He concedes that as things stand the test is as follows: the tribunal should first determine whether on the balance of probabilities, a defendant acted dishonestly by the standards of ordinary and honest members of that profession; and, if it finds that he or she did so, must go on to determine whether it is more likely than not that the defendant realised that what he or she was doing was by those standards, dishonesty [22].

Applying that test it was held that the panel was wrong in its conclusion that K had been dishonest and quashed the findings of dishonesty, remitting the case to the PCC to consider sanction.

Having spent many paragraphs explaining why the current test as used in regulatory proceedings is wrong in law, Mostyn J concedes he is bound by it and the criminal test therefore remains.  Will Mostyn J and Popplewell J’s calls for the civil Barlow Clowes test to be used in regulatory proceedings be heard by the Court of Appeal when a case inevitably makes its way there?  Whatever the relative merits of the alternative tests, clarity is urgently needed and a determination on this vexed question is long overdue.

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