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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
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All eyes will be on the Court of Appeal (or its YouTube livestream) next week as it sits to consider the controversial Mazur judgment
An NHS Foundation Trust breached a consultant’s contract by delegating an investigation into his knowledge of nurse Lucy Letby’s case
Draft guidance for schools on how to support gender-questioning pupils provides ‘more clarity’, but headteachers may still need legal advice, an education lawyer has said
Litigation funder Innsworth Capital, which funded behemoth opt-out action Merricks v Mastercard, can bring a judicial review, the High Court ruled last week
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