23/11/2020

Fraud victim permitted to use Norwich Pharmacal/Bankers Trust disclosure for claims against disclosing bank

I.F.T. S.A.L. Offshore v Barclays Bank UK Plc [2020] EWHC 3125 (Comm)

This case concerned an authorised push payment fraud where the victim of the fraud had obtained disclosure from the fraudster’s bank under the Norwich Pharmacal and Bankers Trust jurisdictions in order to pursue the fraudsters. It having become apparent that the prospects of recovery from the fraudsters were low, and that there was a case against the bank, the client sought permission to use the bank’s disclosure to bring a claim against the bank (having undertook not to do so without the Court’s permission).

The bank resisted, including on the basis that to grant permission would set a precedent for Norwich Pharmacal/Bankers Trust applicants to pursue banks if their claims against the primary wrongdoers were unsuccessful. The bank argued that this would facilitate the bringing of speculative cases against banks by the victims of fraud, putting the banks to expense and expenditure of time and encouraging banks to oppose applications for Norwich Pharmacal/Bankers Trust relief. The Court did not find this argument to be persuasive, finding that such an approach would increase costs and the better way to discourage hopeless claims was to seek strike out and/or summary judgment once they are issued.

In a welcome comment for victims of fraud, the judgment also notes the need probably to take the existing authorities to the Supreme Court in relation to claims involving the common law duty of care and statutory duties owed by banks to persons other than the bank’s own customers.

Matthew McGhee is instructed by Jon Felce at PCB Litigation LLP for the Claimant.

Read the full judgment