Cyber-Fraud, Third Party Fraudsters, and the Expansion of the Quincecare Duty

Stephen Doherty explores some recent cases involving “Quincecare Duty”, which has existed for over thirty years, and what these new precedents mean for modern banking fraud cases.

“Quincecare Duty” was established in Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363, and tells us that a bank or financial institution may be liable for processing a fraudulent transaction if the bank has reasonable grounds for believing that there has been an attempt to defraud its customer.

Remarkably, it was not until the Supreme Court handed down judgment in 2019, in Singularis Holdings Ltd (In Official Liquidation) (A Company Incorporated in the Cayman Islands) v Daiwa Capital Markets Europe Ltd [2019] UKSC 50, that a claimant had successfully argued a breach of the Quincecare Duty. Traditionally, the Quincecare Duty was seen as being engaged in circumstances where corporate customers were defrauded by their own agents (e.g. its employees or directors).

Even then, questions remained as to the true extent of the duty, and in particular whether Quincecare could be successfully deployed in the all too common context of customers (whether businesses or individuals) being defrauded by phishing (i.e. email compromise fraud) and other online scams. Until recently, the broadly assumed position was that the Quincecare Duty did not extend that far, but recent decisions across the common law world have challenged that view, and provide an important avenue for redress for bank customers who have been defrauded in more modern factual circumstances.

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Stephen Doherty explains what this could mean for banking fraud cases in Cyber-Fraud, Third Party Fraudsters, and the Expansion of the Quincecare Duty.

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Stephen practises commercial litigation, with a focus on international dispute resolution, pensions, and financial services law. He has worked in both the Enforcement and the General Counsel’s Division of the Financial Conduct Authority.

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Legal Blogs 8 Apr, 2022