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Supreme Court clarifies Quincecare duty

12/07/2023

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Luke Barden de Lacroix , Senior Associate

In a highly anticipated judgment, today the Supreme Court has clarified the scope of the Quincecare duty owed by banks to their customers. The judgment reverses the Court of Appeal's earlier findings which expanded a bank's duty of care by seemingly obliging the bank to make inquiries as to whether its customer had been tricked into issuing an instruction.

Where the customer, and not its agent, issues the instruction, and provided the instruction is clear, the bank's duty is to execute that instruction. The Supreme Court has held that the duty does not extend to making inquiries as to the instruction's validity.

This clarification of Quincecare - essentially confirming the principles of agency - will be warmly welcomed by those in the banking industry.

It is a basic duty of a bank under its contract with a customer who has a current account in credit to make payments from the account in compliance with the customer’s instructions. This duty is strict. Where the customer has authorised and instructed the bank to make a payment, the bank must carry out the instruction promptly. It is not for the bank to concern itself with the wisdom or risks of its customer’s payment decisions.

https://www.supremecourt.uk/cases/uksc-2022-0075.html