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High Court Issues First Judgment on Quincecare Duty After Landmark Supreme Court Ruling

The so-called Quincecare duty has come under consideration for the first time since the Supreme Court’s ruling in Philipp v Barclays Bank UK plc[1] in July 2023.

As we set out in our article here, the ruling in Philipp was widely seen as a welcome clarification of the scope of the Quincecare duty owed by financial institutions, particularly as the level of online fraud continues to soar.  This most recent judgment, handed down on 14 March 2024, suggests that, following the ruling in Philipp, focus will turn to the adequacy of a bank’s efforts to recover funds from second and third generation recipients.

The decision

In CCP Graduate School Ltd v National Westminster Bank Plc and Santander UK Plc[2], CCP Graduate School Ltd (CCP) claimed that it had been the victim of an “authorized push payment” (APP) fraud.  CCP argued that criminal actors fraudulently induced it to transfer money from its account with National Westminster Bank Plc (NatWest) to an account held with Santander UK Plc (Santander).  CCP argued that, at the time the payments were made, and unbeknownst to CCP, the Santander account was under the control of the criminal actors.


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The Quincecare Duty: A Victory for the Banks?

On July 12, 2023, the UK Supreme Court delivered a landmark decision on the so-called “Quincecare duty” owed by banks to their customers.

In a unanimous judgment in favour of Barclays Bank, the UK’s highest Court held that banks did not owe customers a duty of care in fraud cases where transactions were authorised by the customers directly. As Lord Leggatt said in his judgment: “It is not for the bank to concern itself with the wisdom or risks of its customer’s payment decisions”.

This important clarification will be welcomed by financial institutions, particularly as the level of online fraud continues to soar. However, there are a number of other claims that are currently before the courts that will still be watched with interest, as will this present case as it is remitted to the High Court to decide arguments about the scope of any duty to attempt to claw back payments once a fraud has come to light.

The Supreme Court’s decision also follows the recent passing of the Financial Services and Markets Act 2023, which provides for a mandatory reimbursement scheme, albeit limited to certain payment types within the United Kingdom. In practical terms, therefore, claimants may look

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