Q - Quincecare duty
4/6/24
LARSSON v REVOLUT LTD [2024] EWHC 1287 (Ch)
The claimant was the victim of authorised push payment (APP) fraud by which he was induced by unknown fraudsters to pay funds from his UBS account to purchase non-existent shares. The payments were made to accounts opened in third party names with Revolut and then paid away. Claims against Revolut in contract and tort were struck out. Although the claimant also held an account with Revolut, there was no contractual basis for a duty of care owed by Revolut to him in relation to payments made by him from an account with another bank to an account with Revolut held by someone else [37]. Nor was there any duty of care in tort owed by Revolut to the claimant as a third party payer even if the claimant happened to be a customer of Revolut [49]. To impose such a duty would be a radical extension of a bank’s duties with significant consequences for banking law [58]. The fact that Revolut did block one payment made no difference [60]. A claim against Revolut for dishonestly assisting a breach of trust was not struck out. It was arguable that funds obtained by fraud were impressed with a trust. The claimant was, however, required to amend his claim to identify the individual within Revolut who he said had been dishonest [77].
14/3/24
CCP GRADUATE SCHOOL LTD v NATIONAL WESTMINSTER BANK PLC [2024] EWHC 581 (KB)
A claim by a victim of authorised push payment (APP) fraud against the account holding/paying bank for breach of the so-called Quincecare duty was summarily dismissed because over 6 years had elapsed since the payment was made when the claim was started. The claimant could not rely on extension of time under s.32(1)(c) Limitation Act 1980 because mistake is not an ingredient of a claim for breach of the Quincecare duty. In any event, following Philipp v Barclays, 2023, the alleged breach of a duty was not sustainable in law. An amendment to claim breach of a duty by the paying bank to recover the sums paid was a new claim which did not arise out of the pleaded facts and could not be permitted. A claim against the recipient bank for failure to retrieve the money after notice of the fraud was within the limitation period so far as concerned payments made on one day and that claim could not be struck out as unsustainable in law.
12/7/23
PHILIPP v BARCLAYS BANK UK PLC [2023] UKSC 25
A claim that a bank owed its customer a duty not to make payments which the customer had been induced to make by a fraudster (authorised push payment or APP fraud) was struck out. The duty recognised in Barclays Bank v Quincecare (1992) applies if an instruction is given by a customer’s agent, not by the customer personally. A bank is not required to consider the commercial wisdom of a transaction. It has a strict contractual duty to comply with its mandate unless to do so would be unlawful (eg by contravening money laundering regulation) or would dishonestly assist a breach of trust. If an instruction is given by a customer personally, a duty of care only exists if it is unclear or leaves the bank with a choice how to carry it out. It was not necessary to decide if a duty would exist if the bank knew facts which the customer did not, because here the customer knew the relevant facts. It was arguable that when the customer alerted the bank to the fraud, the bank should have tried to recall the payments sooner, so that part of the claim would be allowed to continue.
30/10/19
SINGULARIS HOLDINGS LTD v DAIWA CAPITAL MARKETS EUROPE LTD [2019] UKSC 50
The defendant broker acted in breach of its duty of care (established in Barclays Bank v Quincecare, 1992) by allowing a director who was the claimant’s sole shareholder, to transfer some $204m from a client account held for the claimant by the defendant when the defendant had been put on inquiry that the director was acting fraudulently. The trial judge had been right to hold that the director’s knowledge was not to be attributed to the claimant, that illegality was not a defence to the claim and that the compensation to which the company was entitled should be discounted by 25% for contributory negligence.
8/10/19
JP MORGAN CHASE BANK NA v FEDERAL REPUBLIC OF NIGERIA [2019] EWCA Civ 1641
The court refused an application by the bank for summary judgment to dismiss a claim that the bank was liable for breach of its duty of care (as established in Barclays Bank plc v Quincecare Ltd, 1992) in allowing payments from a customer’s account when on inquiry that the payments were part of a scheme to defraud the customer. Whether the duty had arisen was fact sensitive and none of the bank’s contract terms were sufficiently worded to exclude the duty. It would need very clear words for an indemnity from the customer to be read as protecting the bank against such claims [71].
1/2/18
SINGULARIS HOLDINGS LTD v DAIWA CAPITAL MARKETS EUROPE LTD [2018] EWCA Civ 84
The defendant broker acted in breach of its duty of care (established in Barclays Bank v Quincecare, 1992) by allowing a director who was the claimant’s sole shareholder, to transfer some $204m from a client account held for the claimant by the defendant when the defendant had been put on inquiry that the director was acting fraudulently. The trial judge had been entitled to hold that the director’s knowledge was not to be attributed to the claimant, that illegality was not a defence to the claim and that the compensation to which the company was entitled should be discounted by 25% for contributory negligence.