The law of dishonesty is changing. Just over a year ago, the Supreme Court in the case of Ivey v Genting Casinos removed the subjective limb of the old test for dishonesty and adopted a simpler, more refined one: did the relevant conduct fall below an objective standard of honesty? 

The impact of this decision is now slowly trickling its way through the English courts and is having some interesting and unexpected consequences.

The recent case of Carr v Formation Group [2018] EWHC 3116 (Ch) is a good example. Under the old test for dishonesty it was possible to call expert evidence to shows that conduct, however dishonest, was "market practice" (or that "everybody was doing it") in order to demonstrate that you did not subjectively appreciate that it fell below the objective standard. In Carr, the defendant had attempted to rely on expert evidence to achieve the same result.

However, Morgan J rejected this, explaining that this could result in some severe consequences for the proper conduct of business. As he quoted from the Court of Appeal judgment in R v Hayes [2018] 1 Cr App R 10 (at paragraph 32 of that judgment):

"The history of the markets have shown that, from time to time, markets adopt patterns of behaviour which are dishonest by the standards of honest and reasonable people; in such cases, the market has simply abandoned ordinary standards of honesty."

In other words, it would be perverse to let "markets" decide their own interpretation of honesty and then be judged by that.

The defence of "everybody was doing it" - already quite tenuous - has been made significantly weaker and this could have an impact across a wide range of industries where ordinarily "dishonest" working cultures and practices have been allowed to develop.