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David Corker

Partner, Corker Binning

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Offences of strict liability, where the individual’s state of mind is irrelevant to establishing culpability, are rare and entirely the creatures of statute

Wilful blindness: Metcalf v SRA [2021] EWHC 2271 (Admin)

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Wilful blindness: Metcalf v SRA [2021] EWHC 2271 (Admin)

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David Corker considers the meaning of 'honesty' in the regulatory context

The judgment in Metcalf v SRA [2021] EWHC 2271 (Admin) provides an opportunity to reconsider the meaning of the legal concept of wilful or Nelsonian blindness and its application to criminal law. In this case the SRA submitted that the solicitor, M, had acted dishonestly because that he had chosen to ignore the dubious nature of transactions that he had facilitated. This SDT agreed with the SRA. M appealed to the High Court. Amongst his several grounds of appeal, he submitted that (a) in principle, blindness was akin to ignorance, and ignorance ought not to be deemed a sufficient ground for a finding of dishonesty; and (b) as a matter of evidence the drawing of adverse inferences from an omission, M’s failure to enquire about those transactions, could never, alone, satisfy the criminal standard of proof in relation to dishonesty.

Criminal comparison

These submissions, although made in a non-criminal law context, would be persuasive if reiterated in a criminal one. To a criminal lawyer, thinking in the abstract, it probably seems wrong or surprising that a person can be guilty of a non-strict liability offence if it is either accepted or cannot be gainsaid that (i) they were ignorant of material facts whilst they acted or omitted to act; and (ii) their ignorance is the root of their culpability. However, this is precisely what the concept of wilful blindness does.

The majority of criminal offences, and all serious ones, require proof to the criminal standard that a person acted with a reprehensible state of mind. There are various such states – for example, dishonesty, per the offences of theft or fraud, or knowledge or suspicion per the several offences of money laundering. Proving the requisite state of mind is the route to the person being culpable. Offences of strict liability, where the individual’s state of mind is irrelevant to establishing culpability, are rare and entirely the creatures of statute. Moreover, it is a canon of our criminal law that one person’s state of mind cannot be ascribed to another, as a person is responsible only for their own crimes. No vicarious liability. See Highbury Poultry Farms v CPS [2018] EWHC 3122 (Admin) for a recent and excellent elucidation of these tenets.

The axiom about the need to prove the particular state of mind is not confined to our criminal law. If anything, in relation to mens rea, criminal law has copied or applied civil law concepts. Consider the most fundamental mens rea concept in criminal law, which must be dishonesty. From where did it emerge? The watershed judgment in Ivey v Genting Casinos [2017] UKSC 67. It was then imported into criminal law by the Court of Appeal in R v Barton [2020] EWCA Crim 575, upturning 40 years of jurisprudence about what dishonesty means in the process. Dishonesty is not unique in its provenance. The same applies for example to knowledge and connivance.

Parliament has left it to the common law, civil and criminal, to define the meaning of mens rea in its various guises. The Fraud Act 2006, for example, the ambitious aim of which was to consolidate a then disparate set of criminal economic crime offences, stipulates three ways in which fraud can be committed, (sections 2-4). Dishonesty is crucial to each (see section 1). The statute, however, omits any definition or prescription as to what this state of mind is, or how it is to be proven. The same point can be made about knowledge or suspicion where they apply in crime. Such is the heavy reliance placed by Parliament on the common law concerning mens rea.

How did we get here?

There is an abundance of jurisprudence where this concept has firstly been explored and elucidated in a plethora of circumstances. This case law is also concerned with why it is correct to deem it a type of knowledge. This substantial corpus of case law has been rarely concerned with the application of criminal law, and the judges have predominantly construed the concept in the context of civil disputes concerning insurance and breach of trust.

I have selected these recent examples which I believe define it best:

The House of Lords case Royal Brunei Airlines v Tan [1995] 2 AC 378 was case where the ratio of the House’s decision turned on what the law regarded as dishonesty. As Lord Nicholls said, at p.389:

In most situations there is little difficulty in identifying how an honest person would behave. Honest people do not intentionally deceive others to their detriment. Honest people do not knowingly take others' property. Unless there is a very good and compelling reason, an honest person does not participate in a transaction if he knows it involves a misapplication of trust assets to the detriment of the beneficiaries. Nor does an honest person in such a case deliberately close his eyes and ears, or deliberately not ask questions, lest he learn something he would rather not know, and then proceed regardless.”

In a House of Lords insurance case, Manifest Shipping v Uni-Polaris [2001] UKHL 1, Lord Clyde held this: “Blind-eye knowledge in my judgment requires a conscious reason for blinding the eye. There must be at least a suspicion of a truth about which you do not want to know and which you refuse to investigate.”

In the same case, Lord Hobhouse wanted to distinguish blind eye knowledge from, for example, suspicion or gross negligence. He held that the best means of discernment was to ascertain the reason for why the person refrained from obtaining actual knowledge of the material fact (NB “privity” here means knowledge): “The illuminating question therefore becomes "why did he not inquire?" If the judge is satisfied that it was because he did not want to know for certain, then a finding of privity should be made. If, on the other hand, he did not inquire because he was too lazy or he was grossly negligent or believed that there was nothing wrong, then privity has not been made out.”

These two examples, which have been quoted affirmatively in subsequent appellate judgments, justify this legal proposition – a conscious decision not to enquire into the existence of a fact is treated as equivalent to knowledge of that fact.

It should be readily apparent that deliberation is required – and that this distinguishes a situation from one of gross negligence. This is why Nelsonian, blind eye and wilful blindness are synonymous. See, for example, the 2020 judgment of the High Court, Uavend Properties v Adsaax [2020] EWHC 2073 (Comm):

“In my judgment, therefore, it makes no difference whether the requisite mental element is described as blind-eye knowledge, Nelsonian blindness or reckless indifference. They are all labels for the same thing, which is a conscious decision not to enquire for fear of discovering an inconvenient truth.”

So another instance of blind eye knowledge being treated as equivalent to actual knowledge and insofar as it is an element of dishonesty pari passu blind eye.

Finally, it is important to quote from a criminal law case. Surprisingly, I have found only one recent such case, R v Holt [2017] EWCA Crim 720. The Court held:

Whilst it was accepted that he should have asked more questions about his wife's affairs, this was not an innocent oversight but was as a result of what the judge described as "Nelsonian blindness" - in other words turning away from an obvious truth.”

This paucity of criminal law jurisprudence is probably explained by the fact that criminal lawyers regard the doctrine that wilful blindness is in law, knowledge, as unarguable. Returning to the M case, we can hopefully understand why his submissions were hopeless – and would, if made in a criminal court, fare as badly.

David Corker is partner at Corker Binning: corkerbinning.com

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