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30 September 2020 / Chris Bushell , Ceri Morgan
Issue: 7904 / Categories: Features , Profession , Commercial
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Customer payments: Held to account

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Processing customer payments: key litigation risks for banks, examined by Chris Bushell & Ceri Morgan

In brief

  • Quincecare duty of care (payment made).
  • Dishonest assistance (payment made).
  • Breach of contract claims (payment not made).

In a trend of recent cases, the court has considered the duties owed by banks to their customers in relation to processing payments into and out of their current or depository accounts. These claims are remarkable both because of the variety of different but intertwining causes of action which have been pursued, and because they stem from such an unremarkable and essential function.

The common theme is that the customer’s payment mandate was made in circumstances where the bank (allegedly) was, or should have been, alerted to the existence of fraud or inappropriate activity in relation to the account. The judgments emphasise the public policy of enlisting banks and financial institutions in the fight against financial crime and money laundering, which has influenced the court’s decision as to whether the relevant

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NEWS
The Law Society RFC Festival of Sport returns next month, bringing together legal and financial services professionals for one of the sector’s largest annual sporting events
Legal aid deserts leave almost one in four without adequate access to justice
The Solicitors Regulation Authority (SRA) has warned solicitors and law firms that using artificial intelligence does not alter their professional obligations, amid concerns over inaccurate legal material and client confidentiality
From forgotten interest claims to case-management appeals, a string of procedural developments offers useful—and occasionally cautionary—lessons for practitioners

Jonathan Fisher KC highlights that it now accounts for around 40% of criminal offences, with roughly 70% involving technology, and argues that the UK cannot simply prosecute its way out of the problem. Detection, investigation and prosecution all require improvement, while different fraud types demand tailored responses.

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