Daiwa Ruling Reinforces Banks' Duty To Guard Against Fraud
Law360, London (November 4, 2019, 11:37 AM GMT) -- Britain’s highest court has reinforced the duty of care banks owe to corporate clients to help protect against fraud in a watershed decision, finding that a Japanese bank negligently paid out hundreds of millions of dollars from a customer’s account when evidence of fraud was obvious.
The Supreme Court upheld an appellate ruling against Daiwa Capital Markets Europe on Wednesday, the first time that a bank has been found liable for breaching its so-called Quincecare duty of care, which essentially requires lenders not to allow their customers to be defrauded.
In a unanimous ruling, the court found that Daiwa had breached...
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