Editors’ Note: The Global Restructuring and Insolvency Developments team of BCLP presents this very concerning opinion for any financial institution that operates in the United Kingdom. Specifically, in Singularis Holdings Ltd (in Official Liquidation) v Daiwa Capital Markets Europe Ltd (copy of the ruling is here), the Court of Appeal (England and Wales) considered a bank’s duty, commonly known as a Quincecare duty, to protect companies from fraud by authorised officers. Robin Ganguly and Alexandra Kirby of Bryan Cave Leighton Paisner’s London office present the GRID readers with a summary and the key takeaways of this ruling.
- Banks (and other financial institutions) have a duty to protect companies from fraud by authorised officers although the extent of the duty will depend upon the services being provided.
- An objective test needs to be satisfied as to whether there were reasonable grounds for the