The claimants sought damages after delays by the bank in processing transfer requests. The bank said that the delays were made pending reports of suspected criminal activity. The bank’s delay had stigmatised the claimant causing further losses. The bank requested that the claims be struck out. The claimants sought permission to amend their claims.
Held: The law is a developing area. As to the level of suspicion required to trigger a duty to report funds: ‘All that is required is that there is a suspicion. If there is, then POCA is triggered regardless of the reasonableness of that suspicion. ‘ and ‘Suspicion is something less than proof. It is also straightforward. In the context of a bank, the relevant employee either suspects or he does not. If he does, he must inform the authorities. Parliament intended suspicion as a subjective fact to be sufficient (1) to expose a person to criminal liability for money laundering and (2) to trigger disclosures to the authorities. Parliament did not require, in addition, that the suspicion be based upon ‘reasonable’ or ‘rational’ grounds. There are good practical reasons for this. Unlike law enforcement agencies, banks have neither the responsibility nor the expertise to investigate criminal activity to satisfy themselves that the grounds for their suspicion are well founded, reasonable or ‘rational’.’
The effect of the Act was to suspend the normal contractual duties between client and bank. The customer could claim only if it could show bad faith (which was not pleaded) or negligence. The requested amendment to allow a claim for breach of confidence failed. Nor could the claimant request the reasons for the disclosure.
Hamblen J
[2009] EWHC 79 (QB), [2009] Lloyd’s Rep FC 225, [2009] 1 Lloyd’s Rep 328, [2009] 6 EG 100
Bailii
Civil Procedure Rules, Proceeds of Crime Act 2002 328
England and Wales
Citing:
Cited – Cobbold v London Borough of Greenwich CA 9-Aug-1999
The tenant had sought an order against the council landlord for failure to repair her dwelling. The defendant appealed refusal of leave to amend the pleadings in anticipation of the trial, now due to start on the following day.
Held: Leave was . .
Cited – UMBS Online, Regina (on the Application Of) v Serious Organised Crime Agency CA 21-Mar-2007
Application for leave to appeal against refusal of leave to bring judicial review of a decision of the respondent agency. Leave to appeal was granted, but the matter was returned to the administrative court for review. . .
Cited – K Ltd v National Westminster Bank Plc and others CA 19-Jul-2006
The bank had declined to act upon a customer’s instructions, reporting its suspicions of criminal activity to the police. Permission was given to proceed but only after a delay. The claimant customer sought its costs.
Held: The customer’s . .
Cited – Equitable Life Assurance Society v Ernst and Young CA 25-Jul-2003
The claimant sought damages from its accountants, saying that had they been advised of the difficulties in their financial situation, they would have been able to avoid the loss of some 2.5 billion pounds, or to sell their assets at a time when . .
Cited – Swain v Hillman CA 21-Oct-1999
Strike out – Realistic Not Fanciful Chance Needed
The proper test for whether an action should be struck out under the new Rules was whether it had a realistic as opposed to a fanciful prospect of success. There was no justification for further attempts to explain the meaning of what are clear . .
Cited – Da Silva, Regina v CACD 11-Jul-2006
The defendant appealed her conviction for assisting another to retain the proceeds of crime. The court considered what was meant by ‘suspicion’.
Held: For a defendant to be convicted of an offence under section 93A(1)(a) of the 1988 Act, he or . .
Cited – Barclays Bank plc v Quincecare Ltd QBD 1992
The relationship of banker and customer is that of agent and principal: ‘Primarily, the relationship between a banker and customer is that of debtor and creditor. But quoad the drawing and payment of the customer’s cheques as against the money of . .
Cited – Weld-Blundell v Stephens HL 1920
A physical cause may be irrelevant as a matter of law. The law is concerned not with causation, but with responsibility. Lord Sumner said: ‘more than half of human kind are tale-bearers by nature’.
Where a legal wrong was committed without loss . .
Cited – Wilson v United Counties Bank Ltd HL 1920
Bank’s duty to client’s reputation and credit
Major Wilson had left England on active service soon after the beginning of the Great War, leaving his business affairs, in a fairly precarious state, with his bank. The jury found that the bank had failed in its duty to supervise his business . .
Cited – Kpohraror v Woolwich Building Society CA 1996
The Society, acting as a bank, had at first failed to pay its customer’s cheque for andpound;4,550, even though there were sufficient funds. The bank said that it had been reported lost. The customer sought damages to his business reputation.
Cited – Christopher Hill Ltd v Ashington Piggeries Ltd CA 1969
The buyer suppied a food formula to a food mixer and claimed damages when the food mix injured his mink. The defendant argued that the level of damages sought exceeded that expectations of the parties when the contract was entered into.
Held: . .
Cited – Barclays Bank plc v Quincecare Ltd QBD 1992
The relationship of banker and customer is that of agent and principal: ‘Primarily, the relationship between a banker and customer is that of debtor and creditor. But quoad the drawing and payment of the customer’s cheques as against the money of . .
Cited by:
Cited – Shah and Another v HSBC Private Bank (UK) Ltd (Costs) CA 4-Feb-2010
. .
Appeal from – Shah and Another v HSBC Private Bank (UK) Ltd CA 4-Feb-2010
Money laundering suspicion to be explained
The customer sought to sue his bank for failing to meet his cheque. The bank sought to rely on the 2002 Act, having reported suspicious activity on freezing the account. He now appealed against summary judgment given for the bank which had refused . .
See Also – Shah and Another v HSBC Private Bank (UK) Ltd QBD 4-Jul-2011
The claimants sought very substantial damages against the bank, arising from the bank’s delay in executing four transactions. The defendant said that it suspected that the proposed transactions concerned criminal property and that, in those . .
See Also – Shah and Another v HSBC Private Bank (UK) Ltd CA 13-Oct-2011
. .
See Also – Shah and Another v HSBC Private Bank (UK) Ltd CA 30-Nov-2011
Appeal against refusal of permission to amend pleadings. The claimants suffered large losses after the bank delayed implementing his instructions after staff members initiated a report under the 2002 Act. The claimant said that the evidence . .
See Also – Shah and Another v HSBC Private Bank (UK) Ltd QBD 16-May-2012
The Claimants claimed damages in a sum in excess of US$300,000,000 arising out of delays by the Defendant, their bankers, in executing four transfers from the Claimants’ account during the period September 2006 to March 2007 and the Defendant’s . .
See Also – Shah and Another v HSBC Private Bank (UK) Ltd QBD 5-Jul-2012
. .
Lists of cited by and citing cases may be incomplete.
Banking, Criminal Practice, Civil Procedure Rules
Updated: 01 November 2021; Ref: scu.280155