Professional Negligence and Liability

Chapter 6



1.The duty of care in general

6.1 In many fields of professional practice the duty of care occupies centre stage. It is the core obligation and it attaches to almost everything which the professional does. This is not true of the profession of banking. There are three main reasons:
  • (1) Although banks undoubtedly provide services to their customers, a significant part of their business consists in lending or other activities where the parties have their own separate interests and do not owe each other a general duty of care.
  • (2) Many of the duties owed by banks in providing services to their customers are strict. For example, a bank which pays on a forged signature has no right to be indemnified by its customer even if the forgery was not reasonably apparent, because the duty to obey the mandate is strict.
  • (3) Many aspects of the business of banking are governed by statute (e.g. the Bills of Exchange Act 1882, the Cheques Act 1957 and the Consumer Credit Act 1974) or by subordinate legislation (e.g. rules made under the Financial Services and Markets Act 2000).

It follows that any description of the duties of care owed by bankers has to be somewhat piecemeal. All that can be done is to identify outcrops of duty of care in a diverse variety of situations.

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