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Customer payments: Held to account

30 September 2020 / Chris Bushell , Ceri Morgan
Issue: 7904 / Categories: Features , Profession , Commercial
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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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