Parsons v Barclay and Co Ltd and Goddard: CA 1910

An inquiry was made between banks as to the financial position of a customer of the defendant Bank. It was answered by the manager containing the words: ‘This information is for your private use only, and is given without any responsibility on our part.’ The customer of the requesting bank who had sought the reference now brought an action for fraud. The question of whether the defendant bank made the representation with the intention that it should be passed on and acted on as his own representation was left to the jury as a question of fact.
Held: The court considered the extent of the duties on a bank manager when asked for a banker’s reference.
Cozens-Hardy MR said: ‘I desire for myself to repudiate entirely the suggestion that when one banker is asked by another for a customer such a question as was asked here, it is in any way the duty of the banker to make inquiries other than what appears from the books of account before him, or, of course, to give information other than what he is acquainted with from his own personal knowledge . . I think that if we were to take the contrary view . . we should necessarily be putting a stop to that very wholesome and useful habit by which the banker answers in confidence and answers honestly, to another banker.’ It would, I think, be unreasonable to impose an additional burden on persons such as bankers who are asked to give references and might, if more than honesty were required, be put to great trouble before all available material had been explored and considered.’


Cozens-Hardy MR


(1910) 103 LT 196, [1908-10] All ER Rep 429, [1910] 26 TLR 628


England and Wales

Cited by:

CitedMutual Life And Citizens’ Assurance Co Ltd And Another v Evatt PC 16-Nov-1971
The plaintiff had been an investor with the defendant. He asked them about an associated company. He was given advice which was incorrect. He claimed damages for negligence.
Held: The company was not itself in the business of giving such . .
CitedHedley Byrne and Co Ltd v Heller and Partners Ltd HL 28-May-1963
Banker’s Liability for Negligent Reference
The appellants were advertising agents. They were liable themselves for advertising space taken for a client, and had sought a financial reference from the defendant bankers to the client. The reference was negligent, but the bankers denied any . .
Lists of cited by and citing cases may be incomplete.

Negligence, Banking

Updated: 12 May 2022; Ref: scu.181266