Philipp v Barclays Bank UK PLC [2023] UKSC 25
On 12 July 2023, the Supreme Court handed down the eagerly-awaited decision in Philipp v Barclays concerning the scope of the Quincecare duty of care, providing an answer to the question of whether such a duty can be said to apply to individual customers dealing with their own funds.
In summary, the Court has confined the duty owed by the banks and held that it does not extend to individuals dealing with their own funds. In reaching its decision the Court noted that Mrs Philipp was not trying to misappropriate funds. That the funds were misappropriated by a third party is not relevant to the Quincecare duty of care, since “fraud does not negative intention”.
The Court held that where the instruction provided to a bank is clear and given by the customer personally, or an agent of the customer who acts with apparent authority, then no further inquiries are required on the part of the bank to verify that instruction. The bank’s immediate duty is therefore to execute the instruction. If an element of the instruction is unclear or requires the bank to exercise some form of discretion or judgment, then the bank must exercise reasonable skill and care in doing so. The banks will no doubt welcome the decision, which represents a return to fundamental banking principles and a restatement of the banks’ role as agent of its customer and where the limits of that agency lie.
Where does the decision leave corporate claimants and individual claimants vis-à-vis transacting banks enabling frauds on their customers? In this article, I look at the decision in Philipp, the position for corporate claimants and individual claimants alike and statutory developments on the horizon.
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Kit Smith (Managing Associate) is a member of Keidan Harrison’s Dispute Resolution team.
