Philipp v Barclays Bank

Richard Creed
What should advertisers know about mobile app install fraud

Five key points from Philipp v Barclays Bank UK Plc

Now that the dust has settled on the immensely important Supreme Court judgement in Philipp v Barclays Bank, we thought that we would share with you our five key reflections.

On 12th July 2023, the UK Supreme Court handed down its landmark decision in Philipp v Barclays Bank UK Plc.

The UK Supreme Court, overturning the Court of Appeal’s decision, held that Barclays Bank UK Plc (the “Bank”) did not owe a Quincecare duty of care to its customer, Mrs Philipp, who fell victim to authorised push payment (“APP”) fraud.

This highly anticipated judgment provides banks, payment institutions and electronic institutions (“PSPs”), with much needed clarity as to the scope of their duty to APP fraud victims. Crucially, it was held that a PSP’s Quincecare duty of care is not triggered in APP fraud cases, where a customer directly authorises the payment transaction. This welcome decision has protected PSPs from the wave of impending APP fraud related litigation they so feared. Nevertheless, legislative reform favouring APP fraud victims is already in motion and will, by design, threaten the protections this judgment granted to PSPs.

What is a ‘Quincecare’ duty of care and who does it apply to?

The principle takes its name from the decision in Barclays Bank plc v Quincecare Ltd [1992] which considered the duty in the context of a current account. It was made clear in the case of Hamblin v World First Limited and Moorwand NL Limited [2020] that the duty also applies to electronic money institutions and, in our view, there is no reason why the court would not also say that it applies to payment institutions.

In Barclays Bank plc v Quincecare Ltd, and in the aforementioned caselaw, it was held that banks possess a duty to refrain from executing payments from a customer’s agent where they have reasonable grounds for believing that the customer’s agent is attempting to defraud its customer.


Under the guise of protecting their money from fraudsters, Mr and Mrs Philipp were deceived into personally instructing Barclays Bank to transfer £700,000 in two instalments from Mrs Philipp’s current account to bank accounts in the United Arab Emirates. Once Mrs Philipp discovered she had fallen victim to APP fraud, she notified the Bank. Two months later, the Bank made attempts to recall the funds which had been transferred. This was to no avail.

Mrs Philipp brought a claim against Barclays Bank to recover the £700,000 she had lost. She claimed that the Bank owed her a Quincecare duty not to carry out her instructions if the Bank has reasonable grounds for believing she was being defrauded.

At first instance, the High Court granted summary judgement in favour of Barclays. It held that the Quincecare duty did not apply to APP fraud. The Court of Appeal, overturning this decision, unanimously redefined the principle of a Quincecare duty holding that it is not confined to cases involving a customer’s agent misappropriating funds but could be expanded to include situations where a customer had directly authorised a fraudulent payment.

The Bank appealed this decision to the UK Supreme Court.

Five key points to note from the single judgement handed down by Lord Leggatt:

  1. The Quincecare duty of care is not triggered in APP fraud cases: The UK Supreme Court clarified that the Quincecare duty is limited to cases concerning payment instructions that have been given by a customer’s agent. This keeps the scope of the principle consistent with that of prior caselaw (including: Barclays Bank plc v Quincecare Ltd [1992], Singularis Holdings Ltd v Diawa Capital Marketings Europe Ltd [2019] andHamblin v World First Limited and Moorwand NL Limited [2020]).  
  2. The importance of the first principles of banking law: The UK Supreme Court reaffirmed that a bank’s primary duty is to honour its customers’ instructions to transfer funds. Indeed, if a bank refuses to act on a customer’s clear mandate it could expose itself to a potential claim. Lord Leggatt clarified that banks must ensure they carry out the payments promptly and not concern themselves with the ‘wisdom or risk of its customer’s payment decision’.   
  3. Act quickly to recall payments: Banks must act quickly and take reasonable steps to try to recall payments as soon as the customer notifies them of APP fraud. They may face potential liability if this is not done. In this case, Mrs Philipp is now free to pursue an alternative claim. The ‘leisurely’ two months taken by Barclay’s bank before attempting to recall funds will now be the subject of a first instance trial.
  4. Check Business terms: The Supreme Court held that an express term could be agreed between the parties which would put the onus on banks to interpret whether a customer has been deceived by a third party before allowing a customer authorised transaction. The effect of such a term could be to revert back to the Court of Appeal’s judgment and introduce the Quincecare duty for PSP’s in APP fraud cases. While the Supreme Court clarified that this duty cannot be implied, as a matter of caution, warning language directly stating that banks will not be found liable for APP fraud should be included in the terms of business. In this case, the Supreme Court viewed words of this nature in Barclays’ terms favourably.
  5. It is for Parliament, Government, and the regulators, not the court, to spearhead regulatory and legislative reform in aid of APP fraud Victims: The Financial Services and Markets Act 2023 (“FSMA 2023”) aims to redress the lacuna caselaw has left for APP fraud victims. It received royal assent on 29 June 2023 and will come into effect in 2024. Section 72 of the FSMA 2023 will, when it comes into force, amend regulation 90 of the Payment Services Regulations 2017 so that it provides a framework for PSPs to reimburse victims of APP fraud in qualifying cases under the Faster Payments Scheme. This framework is limited to domestic payments executed over the Faster Payments Scheme and does not extend to larger businesses. It also provides for a 50-50 allocation of losses between the sending and receiving PSPs.


This much-awaited decision has kept the floodgates of litigation against PSPs closed for the time being. Had the Supreme Court upheld the Court of Appeal’s decision to broaden the scope of the Quincecare duty, PSPs’ potential liability to their customers would have increased exponentially. Notably, PSPs, in an attempt to limit their liability, would be left second-guessing all customer’s payment transfers. This is clearly incompatible the first principles of banking. This judgment rightly maintains the onus on customers to ensure that their payment instructions are correct.

Nonetheless, the widespread relief this decision prompts across the banking sector may be short lived. Change is already underway. Our focus must shift to new legislative reforms. Legislation, such as FSMA 2023, in its endeavour to redress APP fraud victims will inevitably erode the important protections caselaw has granted PSPs and could even pry open the floodgates of litigation PSPs feared.

If you would like to discuss this case with us, or instruct us to update your terms accordingly, please book a time by clicking here.

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