Her Majesty's Commissioners of Customs and Excise v Barclays Bank Plc [2006] UKHL 28 is a leading English tort law

English tort law

English tort law concerns civil wrongs, as distinguished from criminal wrongs, in the law of England and Wales. Some wrongs are the concern of the state, and so the police can enforce the law on the wrongdoers in court – in a criminal case...

 case concerning negligent misstatement and pure economic loss

Pure economic loss

Economic loss refers to financial loss and damage suffered by a person such as can be seen only on a balance sheet rather than as physical injury to the person or destruction of property...

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Facts

Customs and Excise needed to freeze the bank account of a Barclays customer. By law, banks are required to comply with requests for freezing orders and are paid for the service. When it received the request, a Barclays employee replied that it had frozen the bank account. But it had not, and the customer proceeded to empty all of the money from the account. Customs and Excise sued Barclays for the amount that was lost. Barclays argued it had no duty of care, nor had it assumed responsibility.

Court of Appeal

Peter Gibson LJ, Longmore LJ, Lindsay LJ held that there was no duty and proposed that Hedley Byrne type assumption of responsibility should be subsumed into the three fold test from Caparo Industries plc v Dickman.

House of Lords

The House of Lords unanimously disapproved the Court of Appeal's decision, that "assumption of responsibility" was indistinct and subsumed into the law of negligence. It held, however, that in this case, because the bank was required by law to comply with the freezing order, there could not be said to have arisen any assumption of responsibility on Hedley Byrne grounds. Applying then the Caparo test, it was held to not be fair, just and reasonable to impose liability. The bank was therefore not required to reimburse Customs and Excise for the dissipated money.

External links

• Judgment from the House of Lords website