Financial services: "Quincecare Duty" when customer agents act fraudulentlyDownload pdf
Bankers and Registered Agents in UK offshore jurisdictions need to be able to execute payment requests with the comfort that doing so with reasonable skill and diligence will protect them from becoming defendants to fraud claims in circumstances where funds are misappropriated.
The duty to provide such services with reasonable skill and diligence was recently considered by the UK Supreme Court in the context of the infamous ‘Quincecare Duty’ of a service provider to refrain from making payments to agents acting on behalf of a provider’s customers if they have reasonable grounds to believe the agents are acting fraudulently. The Supreme Court decision in Philipp v. Barclays Bank sheds light on the scope of this duty. How should a bank, or others, display a reasonable level of diligence to prevent fraud?