Here, Express takes a detailed look at the documents which have recently been released by the Court…
They show that the plaintiffs, who were customers of the Jersey branch, decided to buy a property in London and hired Bedell Cristin to act as their conveyancing lawyers in late 2019.
Pictured: A fraudster pretended to be the Partner from Bedell Cristin responsible for the purchase, and contacted the buyers.
On 28 July 2020, days before the sale of the property was due to complete, Vishal Agarwal received an email from a fraudster purporting to be the Partner from Bedell Cristin responsible for the purchase, asking him to pay the balance to a bank account based in HSBC bank in St. Helier in the name of ‘Construction Services Limited’.
Mr Agarwal told his bank to make the payment to the account. An employee confirmed the details with him the same day.
Two days later, another employee contacted Mr Agarwal after the bank’s payments team noticed the beneficiary of the payment was not Bedell Cristin. He confirmed this was correct based on the information provided by the fraudster.
Later that same day, another employee called Mr Agarwal after noticing the account location did not correspond with the sort code location of the account number itself, which was for HSBC Bank in Leicester.
Mr Agarwal told the employee to contact the email’s sender, which they did. The fraudster confirmed the account details and payment was then made.
It was only after the payment had been made that it was noticed the domain name in the email used by the fraudster was “bedellcristn” instead of “bedellcristin”.
The pair argued the bank owed them “contractual and /or customary law duties to act with reasonable skill and care in providing banking services”.
They set out their complaints in an order of justice submitted to Royal Court. This included the bank being on notice that the payment details were not those of Bedell Cristin’s usual client account and did not match the bank’s location and the implausibility of Bedell Cristin having set up a company with a bank account in Leicester called ‘Construction Services Limited’ with no reference to the law firm.
They also suggested the bank had failed to verify the account details in a way sufficient to discharge its duty of care and to notice that the email addresses were not legitimate Bedell Cristin email addresses.
The pair also argued the explanation given from the fraudster confirming the account details was implausible and grammatically unusual and the bank should have been “alert to the risk of fraud”.
Pictured: The plaintiffs argued the bank had failed to verify the account details in a way sufficient to discharge its duty of care.
Standard Chartered admitted “a duty of care and contract in tort” was owed to exercise reasonable skill and care in executing the pair’s instructions but denied, if it was alleged, that any wider duty was owed
They denied being under any duty to identify the fraud; or failing to exercise “reasonable care and skill” in executing Mr Agarwal’s instructions.
The bank argued its primary duty was to execute the instructions it received, not to “second guess” them or protect the plaintiffs from the consequences of their own decisions.
They also denied having taken responsibility for verifying the account details, arguing they had instead followed Mr Agarwal’s instructions to query the account details.
The bank also rejected the view it was under any obligation to conduct a “forensic review” of the emails or to identify the missing ‘i’ in Bedell Cristin.
Finally, they said that having identified the discrepancy in the account details, they followed Mr Agarwal’s instructions to query the account details in an email to the person he had himself introduced and represented to them as his attorney.
The pair recently applied to the Royal Court for the bank to release documents relating to its fraud awareness policies and training, as well as warning notices or similar issued in its Jersey branch.
Advocate Lynne Gregory, who represented them, argued that Standard Chartered’s fraud policies and procedures as well as the training of employees was part of the “relevant factual matrix” when determining the nature and scope of the general duty of care they might owe.
Representing Standard Chartered, Oliver Passmore argued that the documents requested were not relevant to any issue in dispute as the plaintiffs were not arguing the bank was under a duty to have in place APP Fraud policies and procedures.
Pictured: The Master of the Royal Court, Advocate Matthew Thompson.
Advocate Thompson said the plaintiffs were entitled to request the documents they did, even though they had agreed to exchange evidence in relation to various primary facts.
He said he considered the plaintiffs’ complaints as amounting to an argument that the bank had failed in “its duty to exercise reasonable skill and care in dealing with communications before payment was authorised” and that it should have raised further concerns before processing Mr Agarwal’s instructions.
“In reaching this conclusion, I am not discounting the defendant’s argument that ultimately it gave effect to the plaintiffs’ instructions and that also it is protected against any liability by its general terms and conditions,” he noted. “Those arguments are however matters for trial.”
He concluded Standard Chartered’s policies were relevant to whether or not its employees exercised reasonable care and skill.
Advocate Thompson argued that providing the relevant policies and procedures would mean the Jurats would have “the full circumstances before them” allowing them to evaluate the actions of the bank’s employees against what was expected of them.