05/06/2020

A life raft for financial institutions in the sea of vicarious liability for rogue traders

Andrew Dinsmore has published an article with Sir Richard Aikens in the Journal of International Banking and Financial Law entitled “A life raft for financial institutions in the sea of vicarious liability for rogue traders” (2020) 6 JIBFL 374.

This article considers two key cases in the development of vicarious liability and attribution:

• Various Claimants v Wm Morrisons Supermarket Plc [2020] UKSC 12, [2020] 2 WLR 941
• Barclays Bank v Various Claimants [2020] UKSC 13, [2020] 2 WLR 960

These decisions mark a sharp change in direction in the law of vicarious liability giving renewed significance to the case law on a “frolic of one’s own. The authors conclude that financial institutions have a life raft in a sea of vicarious liability for the actions of a rogue trader in an unlawful means conspiracy and deceit.

The article also concludes that this change is complemented by a recent Supreme Court judgment in Singularis Holdings Ltd (In Liquidation) v Daiwa Capital Markets Europe Ltd [2019] UKSC 50. In this case, the court declined to attribute to the company the dishonest mental state of that company’s president, who was also chairman, treasurer, a director and the sole shareholder.

Andrew has a busy fraud practice and his recent fraud instructions include E,D & F Man Capital Markets Limited v Come Harvest Limited & others [2019] EWHC 1661 (Comm), [2019] EWCA Civ 2073 (led by David Lewis QC) which concerned a jurisdiction challenge in the context of a US$284m fraud and is now proceeding to trial. He is also acting as sole counsel in a £3.5m yacht fraud dispute and a six-figure fraud in relation to a truffle tree investment scheme in Spain.

The article was first published by the Journal of International Banking and Financial Law on 1/06/2020.

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