English High Court limits quincecare duty in App Fraud cases
In its recent judgment, the English High Court has confirmed that a bank’s Quincecare duty (i.e. the duty to act with reasonable care and skill when executing a customer’s payment instructions) does not extend to authorised push payment (“APP”) frauds involving individual customers. The ruling, which reflects the growing judicial trend in APP frauds, and on which we have previously written, has important ramifications for individual and corporate customers alike.
In Phillips v Barclays Bank UK Plc , which concerned a summary judgment application made by the defendant bank, the claimant alleged that the bank owed a duty of care to protect her from the consequences of APP fraud. However, the bank argued that the Quincecare duty did not extend to a duty to protect the claimant from the consequences of her own actions. As the claimant’s payment instructions were valid and not fraudulently given (i.e. authorised), the bank held that it should not “be made an insurer of last resort for fraud perpetrated against customers”.