Hugh Sims KC, representing Mrs Philipp, agreed and noted that, by the services they provide, banks are better placed to identify when a customer is a victim of APP fraud and therefore also in a better position to avoid the loss.
Philipp further argues that, in light of the rise in APP fraud cases, the extension of the duty is necessary to promote public confidence in the industry, and already sits in harmony with the existing industry practice as the extended duty is only triggered where a bank has reasonable grounds to suspect fraud by reference to the already prudent banker.
It was therefore argued that Mrs Philipp's case did not wish to make the bank liable for fraud; instead, it seeks to make the bank liable only for the bank's own carelessness in proceeding with an instruction when it is implicit that a customer wouldn't want the bank to execute this. It is argued that this objective standard also manages conflict when it comes to delay considerations, as a "prudent banker" would have to take the essence of time into account.
The Court appeared wary of this argument and questioned whether an implied qualification can override an agreed contractual arrangement between the bank and customer. The Court further warned Hugh Sims KC against slipping into arguments which support a cause of action in professional negligence as opposed to under the Quincecare duty. Only time will tell, however, whether this scrutiny is indicative of the decision which might be reached, or whether it was intended to simply test the robustness of Philipp's case.
The Supreme Court has a wider remit than the Court of Appeal, and as stated by the Court during the submissions, is not restricted to following the analysis of the Quincecare duty as it was set out in Barclays Bank plc v Quincecare Ltd. Further, the Supreme Court has jurisdiction to consider any question necessary to be determined for the purposes of carrying out justice and, to this effect, may well consider the issues in this case through a wider public policy lens.
We await judgment to see how the Supreme Court determines the scope of the Quincecare duty, or indeed exercises its ability to redefine it. However, if you would like to discuss the issues which have been raised by this case, please do feel free to contact us using the details below.
We will post further commentary when the outcome of the case is decided.