In Hamblin & Anor v Moorwand & Anor [2025] EWHC 817 (Ch) and Santander UK plc v CCP Graduate School Limited [2025] EWHC 667 (KB) the High Court considered the scope of the so called Quincecare duty and the impact of the Supreme Court’s judgment in Philipp v Barclays Bank [2023] UKSC 25 in clarifying the nature and extent of that duty. Both cases reflect an attempt to use novel procedural routes and arguments to test the limits of the Philipp’s judgment.

The Quincecare duty

The Quincecare duty (derived from the case of Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363) is authority for the principle that a bank can have a duty not to execute a payment instruction given by an agent of the customer without making further inquiries if the bank has reasonable grounds for believing that the agent is attempting to defraud the customer.

The scope of the Quincecare duty was clarified in Philipp v Barclays Bank, where the Supreme Court noted that the Quincecare duty does not apply to invalidate a payment or give rise to a claim against a bank in cases where the customer has unequivocally authorised and instructed the bank to make the payment.

Following Philipp there have been a number of cases which have sought to explore the scope and nature of the restrictions that were clarified in Philipp, and the two cases below are examples of such cases.

Hamblin & Ors v Moorwand & Ors [2025] EWHC 817 (Ch)

Background

In this case, the two individual victims of an authorised push payment fraud brought a claim based on the Quincecare duty against an Electronic Money Institution (EMI) which provided the mule account into which they paid £160,000 and which was ultimately transferred out of the account to the fraudsters. The Judge accepted that the Quincecare duty would apply to an EMI although they are not a “bank” for the purposes of common law or regulation. Unusually, the victims brought the claim as a derivative action on behalf of the company in whose name the mule account was set up. The company had been set up using the stolen identity of a real individual. The electronic money account had also been set up, and the payments made, using that identity.

Decision

At first instance, the Court concluded that the Quincecare duty had not been breached. Since the first instance decision was reached by a Circuit Judge, the first appeal route was to a High Court Judge. The High Court reversed the first instance decision concluding that whilst a bank receiving a payment instruction from an agent of a company will typically be protected by the agent having actual or ostensible authority to give the payment instruction (even where the agent is a fraudster) (as per Philipps), where there are “circumstances of dishonesty apparent to the bank which would cause a reasonable banker before executing the instruction to make inquiries” [18] the bank should execute those inquiries prior to authorising the payment. If they do not, the bank will be in breach of duty.

The Judge concluded that, in this case the first instance court had wrongly equated the company with its agent. The fraudster did not have any actual authority vis-a-vis the company and the agent also did not have ostensible authority as the documents demonstrated that, at the account opening phase, the EMI had actual awareness of the need for further inquiries, and there were contradictions between the company's stated business and the nature of the transactions carried out by the purported agent. For these reasons, the EMI had been put on inquiry that the transactions were not authorised by the company, and they had not made inquiries prior to executing the payment instruction such that the Quincecare duty was engaged and breached. The EMI was ordered to restore the missing funds to the company’s account.

This claim used a novel procedural route, a derivative claim, to bring a claim which would otherwise have likely fallen foul of the limitations set in Philipp i.e. because the victims themselves have unequivocally authorised the transactions. This may encourage further claimants to attempt derivative actions where the facts are similar to this case. However, it should be noted that the appropriateness of the use of a derivative action in these circumstances was not under appeal (and therefore not considered) by the Judge.

The judgment is available here.

Santander UK plc v CCP Graduate School Limited [2025] EWHC 667 (KB)

Background

This case also concerned an authorised push payment fraud which induced the claimant to transfer c. £400,000 across 15 payments from its account to an account held with Santander on behalf of PGW Consultants Limited. The fraudsters shortly thereafter transferred the payments out of that account, prior to the bank being alerted to the fraud.

The claimant sought damages from (a) its bank (the paying bank) on the basis of the Quincecare duty and (b) the recipient bank arguing that in circumstances where payments were made into a bank account as the result of fraud the receiving bank owes a tortious duty of retrieval to the victim of the fraud.

The claim was framed as an application for summary dismissal and/or strike out of the claim by the bank.

Decision

At first instance, the Master awarded summary judgment in relation to (a) but refused summary judgment in relation to (b) finding that it was sufficiently arguable that there is a tortious duty of retrieval arising in favour of a third party which was separate to the bank’s contractual duties to its customer. Since the first instance decision was reached by a High Court Master, the route of appeal was to a High Court Judge. On appeal the Judge struck out the claim on the basis that the claimant’s case was “fanciful” and without realistic prospects of success [50-51].

Analysing Philipp, the Judge explained that the Quincecare duty derives from the contractual relationship between the bank and its customer and is a specific manifestation of the bank’s obligation to exercise reasonable skill and care in the execution of its instructions. As a creature of contract, the duty cannot extend to third parties with whom the bank has no contractual relationship [38-40], and therefore there was, on the facts, no duty and no breach.

The judge also rejected that the retrieval duty should be recognised as an incremental development of tort law. This reaffirms the decision in Larsson v Revolut Ltd [2024] EWHC 1287 (Ch), a similar case involving an APP fraud which alleged a claim in tort on the basis of an alleged duty owed by the recipient bank to the victim in circumstances where the victim also happened to be a customer of the recipient bank. The judge in that case held that where the payment was unconnected with the bank-customer relationship in question, the fact that it was a customer of the recipient bank as well as the paying bank was not relevant to the analysis, and did not give rise to a duty on the part of the recipient bank. The Judge considered the same analysis to apply on these facts – there was no relationship which gave rise to a sufficient degree of proximity to ground a tortious duty [45]. The common practice of banks offering indemnities to each other to address the need to urgently stop further payments out of an account did not change the analysis.

The Judge also had some sympathy for the bank’s arguments that given the number and speed of transactions in modern day banking, it would be extremely onerous to monitor and chase funds through potentially an extensive chain of receiving banks.

The judgment is available here.

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