The Quincecare Duty in flux: The implications for banks and digital asset platforms

• Main Authors: TEO, Jason., YOONG, Aaron
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2023
• Subjects: Banking and Finance Law; Science and Technology Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/4338; https://ink.library.smu.edu.sg/context/sol_research/article/6296/viewcontent/Quincecare_Duty_in_Flux.pdf
• Institution: Singapore Management University

With the increased sophistication of online payment methods, it is unsurprising that incidents of fraud have become commonplace, with fraudsters often employing innovative means against unsuspecting victims. Users, regulators and industry players in the banking sector are, in many aspects, struggling to keep pace with the continually evolving legal landscape of the fraud space. Similar challenges also begin to arise in the digital asset space for the various platforms engaged (whether for trading or staking). In recent years, a significant question has resurfaced concerning the liability of entities such as banks and digital asset platforms for the losses suffered by fraud victims, specifically when these entities facilitated the fraudulent payments. Central to this debate is the “Quincecare duty”, originating from the eponymous decision of Barclays Bank plc v Quincecare Ltd and another [1992] 4 All ER 363 (“Quincecare”). This duty compels payment services providers to use reasonable skill and care when executing its customers’ instructions, and to refrain from carrying out their customer’s instructions if they have reasonable grounds to believe that the instructions are the result of fraud and would have the effect of misappropriating funds.