20210419 RegTech: Knowledge, Belief and Suspicion and the trap of Wilful Blindness.

Suspicion is not proved.

Suspicion may be founded on facts but if those facts, combined, amount to certainty, that’s knowledge.

But often, suspicion is based on ″intelligence″ which is about as far away from evidence as one can get. Intelligence is unsubstantiated; it is not corroborated; it is not far removed from gossip.

This is where it gets silly. Silly but very serious.

A court may decide ″as a fact″ that you were suspicious because the judge or jury takes a different view of the intelligence, information or evidence in your hands. Laws talk about ″had reasonable cause to believe″ or ″had reasonable cause to suspect.″

This is the first step in a concept known as ″wilful blindness.″

Wilful blindness is first found in English law in the late 19th Century which, elsewhere, I have described as ″the golden age of English jurisprudence.″ And it was. Many of the concepts that we find all over the world, not only in Common Law systems, originate from the senior English courts of that period.

Wilful blindness isn’t complicated but prosecutors and judges find it difficult to explain to jurors and in this short piece, I’m going to skim over it too. But it’s vitally important: we find it all over the world in financial crime laws, often phrased in ways that make it appear as if the draftsman was trying to disassociate the concept from its origins (yes, Australia, I’m talking about you, amongst others) .

To summarise: it’s where a person who is required to make an informed decision about something deliberately, recklessly or negligently fails to ensure he has the relevant information to enable him to do so.

A person who doesn’t ask what’s in the package someone has given him to hand carry on an aeroplane can’t escape liability: he should have asked. If he didn’t ask he
a) elected not to or
b) didn’t think about it or
c) chose to run the risk when he was at the check-in desk and the counter-clerk asked ″has anyone asked you to carry anything for them?″

So where does this leave us?

The fact is that a Court can find that there was Knowledge, Belief or Suspicion if a reasonable person with the defendant’s characteristics (language, education, background, experience and the proven facts, information or intelligence available to him) would have been suspicious.

The second is that this is always, by definition, second-guessing. It’s a decision reached ex post facto. Worse, the pressures on a jury are very different to the pressures on a person working in a bank, etc. and having to decide if something is suspicious. And the information is presented to them in a very different way to how it arrived, if it did arrive, before the defendant in the course of his routine job.