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Freshfields Risk & Compliance

| 4 minutes read

High Court hands down its first judgment on the Quincecare duty since Philipp

The High Court’s recent judgment in CCP Graduate School Ltd v National Westminster Bank, [2024] EWHC 581 (KB) is the first decision concerning the much-litigated Quincecare duty since the Supreme Court’s decision in Philipp v Barclays Bank. 

What is the Quincecare duty?

By way of reminder, the Quincecare duty (as described in Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363) obliges banks to refrain from executing a customer’s instructions if, and for so long as, the bank is ‘on inquiry’ that these instructions are an attempt to misappropriate the customer’s funds.

The scope of this duty has been the subject of much recent litigation (see previous blogs here and here), including in Philipp, where the Court of Appeal held that in certain circumstances a Quincecare-style claim could be available to a customer who had been induced by the fraud of a third party to authorise payments from the customer’s account. However, this potential expansion of the duty was rejected by the Supreme Court (Philipp v Barclays Bank UK plc [2023] UKSC 25) – see our previous blog here.


This decision concerns authorised push payment (APP) fraud, where CCP was induced by third party fraudsters to a number of payments from its account with NatWest to an account with Santander, totalling £415,000. CCP sent the payments on the basis they would be applied from the Santander account as investments by PWG Limited. It transpired the Santander account was in the name of “PGW Consultants Limited” and was under the control of a criminal gang who. By the time CCP’s director raised a “fraud alert” regarding the payments, the funds in the Santander account had been dissipated. 

CCP claimed that NatWest had breached its Quincecare duty and Santander had also breached its duty to take reasonable care to prevent its accounts being used as instruments of fraud. 

CCP only issued these claims more than 6 years after the final payment was made to the Santander account, and therefore both NatWest and Santander applied for summary dismissal of the claim. After this application was made, but before it was heard, the Supreme Court handed down its decision in Philipp, which left open the possibility that a bank could be sued by its customer for breaching its duty to take reasonable steps to retrieve or recover sums paid out as a result of the fraud (once the fraud had come to light) (the retrieval duty). In response to the banks’ application, and (it appears) in light of the Supreme Court’s judgment in Philipp, CCP applied for permission to amend its claim to plead a breach of the retrieval duty.

Findings on the Quincecare duty and retrieval duty

As against NatWest:

  • The Master agreed the claim was statute barred, but considered, in the alternative, whether the claim could be struck out on the basis that following the Supreme Court’s decision in Philipp, the Quincecare duty is not recognisable in law in cases of APP fraud. The Master agreed the Quincecare duty would only be engaged if the bank has doubts as to the validity of the customer’s instructions. Here, while there was a discrepancy between the names of the accounts (PGW Limited and PGW Consultants Limited), the Master found (i) that would be a case founded on breach of mandate, not the Quincecare duty, and (ii) the mandate required NatWest to comply with instructions based on sort code and account number, and therefore NatWest had to comply with these instructions. 
  • The Master also held he had no power to permit the amendment to plead the retrieval duty, as it was a new claim brought outside the limitation period which did not arise on the same or substantially the same facts as the existing claim. However, he went on to consider (in the alternative), if he had discretion, whether he would have permitted the amendments, holding that he would have. The reason for this was there was a lack of clarity regarding the retrieval steps [NatWest] had taken, and the timing of those steps, and therefore it was not clear whether they would have made a difference. Interestingly, he commented that “the most obvious step, if not the principal step, that could be taken by a bank which is on notice of a fraudulent scheme such as the one alleged here, is to offer an indemnity to the bank receiving payment. Such an indemnity, I am told by counsel, is against liability which the receiving bank might incur to its customer (and possibly others) when preventing any further payment out and as I understand it, allows the account to be effectively frozen.” 

As against Santander: 

  • The Master expressly acknowledged that there could be no Quincecare-type duty falling on Santander as “such a duty would be inconsistent with the contractual duty to effect any mandate made by their customer” – and there is no evidence to suggest that Santander did not receive authorisation to make payments out of that account. 
  • In terms of the retrieval duty, the claim was already pleaded (with some defects), and the Master noted that “whether or not it could be described as a developing area of law, there is to my mind some uncertainty as to whether any such duty lies on the bank of those who can be assumed to have perpetrated the fraud.” The Master also noted that “there might at least be some basis for arguing” that the retrieval duty may require, or “at is at least consistent with” a duty on banks to have a series of indemnities in place under which each bank from which the funds were sent would indemnify the bank to which the funds were sent against any liability arising from the receiving bank freezing the account. The Master also indicated this may need to be capable of being passed along the line “promptly” given the likelihood criminals will often seek to funnel the money on through a series of further bank accounts. In this case, the Master held that the possible existence of such a system would be relevant to consider whether such a duty should be recognised, and more evidence would be forthcoming if the claim were not struck out. Therefore, the Master declined to summarily dismiss the retrieval duty claim.

Key takeaways - Where do we stand post-Philipp?

This decision is helpful in reiterating the position in Philipp that the Quincecare duty does not apply to cases of APP fraud.  It also shows that Claimants may seek to avail of the potential avenue for recourse identified by the Supreme Court by claiming a breach of the “retrieval duty”.

The scope of such a duty remains unclear, including whether it extends to the bank which receives the fraudulent payments. However, this decision provides some insights as to the steps a Court may expect a bank to take to meet such a duty, such as the series of indemnities mentioned above. Given the claim against Santander was not dismissed, watch this space for further updates on how the retrieval duty plays out!


financial institutions, litigation, uk, financial services litigation, financial services