Supreme Court clarifies so-called Quincecare duty on financial institutions executing customer payments

The Supreme Court last week handed down its seminal judgment in Philipp v Barclays Bank UK plc [2023] UKSC 25, considering the application of the so-called Quincecare duty to the victim of an “authorised push payment” fraud (in which the victim is induced to authorise their bank to send a payment to a bank account controlled by the fraudster).

The decision establishes that a bank's duty to act with reasonable skill and care when processing customer payments is limited and applies only to “interpreting, ascertaining, and acting in accordance with the instructions” of the customer. The so-called Quincecare duty is simply an application of this general duty above and arises specifically where an agent of the customer purports to give a payment instruction and the bank has reasonable grounds for believing that it is an attempt to defraud the customer. It therefore does not arise in the authorised push payment context, where the mandate is validly made by the victim of the fraud.

For more information on the decision and its implications for financial institutions see this post on our Banking Litigation Notes blog.