Singularis: When the Bank Must Say No!

In the ordinary course of events a banker is required to honour its customer's instructions and will be strictly liable for any failure to do so.  However there has been a longstanding exception to this principle: namely where a bank suspects that the payment instructions are themselves fraudulent, even if the person giving the instructions is acting within the four corners of the bank mandate and potentially where the person giving the instructions is themselves acting honestly.

On 23rd and 24th July 2019, the Supreme Court heard the case of Singularis Holdings Limited (in liquidation) v Daiwa Capital Markets Europe Limited, an appeal against the Court of Appeal’s decision that the defendant bank was liable to the claimant for US$152m under the principle set out in Barclays Bank plc v Quincecare Limited [1992] 4 All ER 363 for failing to stop fraudulent payments authorised by a director.

The panel, consisting of Lady Hale, Lord Reed, Lord Lloyd-Jones, Lord Sales and Lord Thomas, heard argument as to the scope of the Quincecare duty of care where a bank is on enquiry that fraudulent payment instructions are being given. The issue of attribution and the proper application of the principles set out by the Supreme Court and House of Lords respectively in Bilta  (UK) Limited (in liquidation) v Nazir (No 2) [2016] AC 1, and in Tesco v Nattrass [1972] AC 153 were also in play because the defendant argued that it had an ex turpi causa defence since the claimant was a “one-man” company, so the director’s dishonesty should be attributed to the claimant.

Judgment is awaited and may not be available before the end of the year; but Paul Downes QC and Simon Oakes have analysed the proceedings before the Supreme Court and will seek to anticipate the outcome of the appeal based on the judicial interventions in the course of argument.  The seminar will also consider the extent of a banker's duty to prevent fraud in this and other analogous situations.

The issue of whether and in what circumstances a banker is required not to honour its customer's mandate where fraud is suspected is a matter of increasing importance given the growth of phishing and banker impersonator confidence frauds.  This seminar is essential for anybody advising banks facing claims for negligence where the customer has been the victim of a fraud. 

Timings: 5:45pm welcome refreshments for a 6:00pm start. (please note the slightly earlier start time).  Followed by a networking reception from 7pm.

We do hope you will join us at what promises to be an excellent event. Please register using the button below:

Paul Downes QC

Paul is recognised as a formidable advocate and cross-examiner who is presently instructed in some of the hardest fought pieces of commercial and banking litigation at the bar. The directories describe him as “incredibly astute”, “a terrific cross-examiner” and “brave and dogged”. His advocacy is likewise praised as “powerful”, “phenomenal” and “fearless”. Paul is leading counsel for West Ham United in their various disputes over the London Stadium (including having appeared for them in the Court of Appeal in West Ham v E20) and is acting for Sheffield United Limited in their dispute with His Royal Highness Prince Abdullah Al Saud which is listed for trial in May 2019.  Paul is also leading counsel for the Claimant in N v RBS (coming to trial at the end of January 2019), listed by The Lawyer magazine as one of the top 20 cases of 2019.

Before coming to the Bar, Paul worked for Barclays Bank and is an Associate of the Chartered Banker Institute. He also previously was appointed an assistant examiner for the Institute in banking law and accountancy.  He is recommended as a leading silk for banking & finance and commercial dispute resolution in Chambers & Partners UK Bar and for Banking & Finance, Commercial Litigation, Financial Services and Fraud: Civil in Legal 500.

To view Paul's full website profile, please click here.

Simon Oakes

Simon Oakes practises in commercial law, with a particular focus on banking & financial services, and complex commercial fraud cases.

Simon has a wealth of experience in some of the most significant banking and financial services cases of recent years, from major interest rate hedging product litigation to regulatory investigations against individuals. He has a deep knowledge of the allegations of LIBOR misconduct against several major banks, a great deal of experience in misselling cases, and a wealth of experience of developing legal and tactical arguments in major commercial litigation.

Significant recent instructions include:

Two ongoing multi-million pound deceit claims against Bank of Scotland and/or Lloyds Banking Group

Aldersgate & Ors v Bank of Scotland & Anor [2018] EWHC 2601 (Comm): a Commercial Court claim in excess of £100 million, alleging fraudulent and negligent misrepresentation arising out of LIBOR manipulation. The case also involved a ground-breaking interlocutory application by the defendant, attempting to withdraw pleaded admissions of findings by global regulators.
The LIBOR test case of Graiseley Properties Ltd v Barclays Bank Plc, Deutsche Bank AG v Unitech Global Ltd [2013] EWCA Civ 1372 (CA), in the Court of Appeal and in the High Court. One of The Lawyer’s ‘Top 20 cases’ of 2013.
Hockin v Royal Bank of Scotland in the High Court: a £55 million Financial List banking case concerning interest rate products and the bank’s Global Recovery Group (‘GRG’), and involving issues of misrepresentation, LIBOR manipulation, unlawful means conspiracy and implied duties of good faith.
Viavi v Shannan & Others [2018] EWCA Civ 681: a significant dispute about the validity of deeds, the principle in Re Duomatic, and estoppel by deed.
Advising as to the impact of Brexit on the security of motor insurers.

To view Simon's full website profile, please click here.