What payment service providers need to consider ahead of implementation

We are defending financial institutions from multiple claims for breach of the so called Quincecare duty and have seen claimant law firms increasingly seek to expand the scope of the duty to try to make financial institutions liable for any frauds taking place through their accounts. Where a bank is unknowingly or innocently “mixed up” in a fraud as a result of duly complying with the customer’s instructions (who are not themselves complicit in or aware of the fraud), the question is in what circumstances should the bank be held liable for any loss suffered on the basis of its purported greater ability to detect fraud. The answer to this question, eagerly awaited by many, has finally come from the Supreme Court in its judgment in Philipp v Barclays Bank UK PLC [2023] UKSC 25.

The Supreme Court of Gibraltar this week found in favour of our clients and dismissed an application by the defendants to strike out our clients’ claim against them on all three grounds relied upon by the defendants.  Our clients’ claims - which, after this week’s success, will now continue against Hassans law firm and two of Hassans’ partners - are premised on allegations of dishonest assistance.  At trial, the court will ultimately decide whether Hassans and the named partners dishonestly (and with full knowledge of the circumstances) assisted one of our clients’ former directors, Joseph Ackerman, unilaterally and fraudulently - without the knowledge and consent of his co-director, Naomi Ackerman – to effect loans on uncommercial terms from their subsidiaries to other entities in which Mr Ackerman had a personal interest in breach of his fiduciary duties to our clients.     In reaching its decision to dismiss the defendants’ strike out application, the Supreme Court of Gibraltar grappled with the thorny and very much current issue of when a claim involving allegations of fraud is time-barred.  The judgment is of relevance to English practitioners as the relevant provisions of the Gibraltar legislation mirror section 32(1)(a) of the English Limitation Act 1980:  the provision which postpones the limitation period in cases of fraud.