There have been shifting sands over many years regarding the appropriate test for dishonesty, a concept that crosses both criminal and civil law.
A finding of dishonesty has always involved an objective test, namely:
whether by the ordinary standards of reasonable and honest people what was done was dishonest.
However, there has been a divergence in recent years between the appropriate test under criminal law and civil law and also, until the last 10 years, there has been a degree of flip-flopping within the civil jurisdiction as to which test is appropriate. The criminal test was derived from R v Ghosh  QB 1053 and included a second, subjective, limb:
whether the defendant himself realised that what he was doing was, by the standards of reasonable and honest people, dishonest.
Within the civil jurisdiction, the uncertainty was reflected in the fact that, in the case of Twinsectra v Yardley  2 AC 164, the House of Lords approved the criminal test whereas, either side of that decision, two Privy Council decisions (latterly Barlow Clowes International Ltd v Eurotrust International Ltd  1 WLR 1476) advocated an exclusively objective test and discounting the second limb in Ghosh. The Barlow Clowes test has been applied consistently in civil proceedings, though the tension between the authorities has remained unsatisfactory.
The case of Ivey v Genting Casinos (UK) Ltd t/a Crockfords  UKSC 67 gives a Supreme Court stamp of approval to the understood civil test and resolves the disparity, applying the same test to both civil and criminal cases.
In an interesting factual scenario (relayed in quite compelling fashion by Lord Hughes), a renowned poker player Peter Ivey and friend perpetrated a sting operation on Genting Casino in Mayfair. Playing Punto Banco, they persuaded an unsuspecting croupier that they were superstitious and required that the same card deck be used and sorted in such a way as would enable Ivey to employ a technique called ‘edge-sorting’. As a consequence, he was able to identify ‘good’ cards, significantly increase his chances and ultimately won £7.7 million. The casino conducted an investigation and spotted what had occurred. It refused to pay out on the basis that Ivey had cheated. For his part, he contended it was legitimate gamesmanship and, on the basis that he did not believe he had been dishonest, he could not have cheated.
Ivey was actually decided in favour of the casino on the basis that he had cheated and that dishonesty was not a necessary ingredient of cheating. Therefore consideration of the test for dishonesty was obiter, though likely no less powerful in terms of providing precedent for the future.
Lord Hughes (with whom the other Lords agreed) favoured the test in Barlow Clowes confirming:
“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 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. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest.”
So the defendant’s subjective mindset as to his conduct is relevant only insofar as giving a factual scenario against which an objective assessment is made as to whether the conduct is dishonest. It matters little if he thought himself honest if an ordinary person would think otherwise.
The prior subjective test was, to some degree, understandable but left open the prospect of a fraudster escaping liability of the basis that his or her own morality was so warped that they did not realise their actions were dishonest.
The Barlow Clowes/Ivey test does not ignore a person’s subjective understanding but instead makes that one of a number of factors that the hypothetical reasonable person would take into account.
To illustrate this point, Lord Hughes used an example originating from the Ghosh case. Take a man who comes from a country where public transport is free. On his first day in England he uses the bus and (assuming we still live in a world where conductors dispense tickets) he gets off without paying.
As support for the rationale behind the subjective/objective test, the Court in Ghosh found that whilst his conduct was objectively dishonest, his mind was clearly honest and it was improper that he be found guilty. Lord Hughes considered that, properly understood, the objective test alone achieved the desired outcome: a reasonable and honest person would place real weight on the defendant’s mindset and conclude that he was not acting dishonestly.
By contrast, whilst Ivey was adamant that he did not consider his conduct dishonest, the court found that ordinary standards of honesty would say otherwise.
We now have a clear, logical test for dishonesty, whatever the forum. Subjective mindset is important to give context against which conduct can be objectively judged but will not offer an escape route.