Dishonest Assistance in UK Law

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 different standards. The Court of Appeal held this to be a correct state of the law and their Lordships agree.

Secondly, it is quite unreal to suppose that Mr Henwood needed to know all the details to which the court referred before he had grounds to suspect that Mr Clowes and Mr Cramer were misappropriating their investors' money. Someone can know, and can certainly suspect, that he is assisting in a misappropriation of money without knowing that the money is held on trust or what a trust means: see Twinsectra Ltd v Yardley [2002] 2 AC 164 at para 19 (Lord Hoffmann) and para 135 (Lord Millett).

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. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people.

Therefore I consider that the courts should continue to apply that test and that your Lordships should state 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.

In my view in a case for accessory liability there is no requirement for there to be trust property. That has led to difficulties which were addressed by Lord Millett in Paragon Finance. It involves providing dishonest assistance to somebody else who is in a fiduciary capacity has committed a breach of his fiduciary duties. It must not be forgotten that in most cases the breach can only occur as a result of the activities of the assistor.

LLB also submitted that this case was unlike Lister and Mohamud. It was submitted that LLB did not have any relationship with the victim, Group Seven. Here, Mr Louanjli's employment with LLB as a relationship manager for Larn/Nobre allowed Mr Louanjli to pass on information about LLB's relationship with Larn/Nobre and the statements made by Mr Louanjli were expressed to be made on behalf of LLB, a matter which was important to Notable.

It is not enough that the defendant merely suspects something to be the case, or that he negligently refrains from making further enquiries. The judgments also make it clear that the existence of the suspicion is to be judged subjectively by reference to the beliefs of the relevant person, and that the decision to avoid obtaining confirmation must be deliberate.