WHY YOU SHOULDN’T BANK ON SUMMARY JUDGMENT: THE COURT SHOULD NOT CONDUCT A “MINI TRIAL” ON SUMMARY JUDGMENT APPLICATIONS
In Philipp v Barclays Bank UK Plc  EWCA Civ 318 the Court of Appeal allowed an appeal against an order giving the defendant summary judgment in favour of the defendant bank. The court emphasised that summary judgment applications should not be “mini trials”. The appropriate time to consider issues relating to the extent of a duty of care, and whether it has been breached, is often at trial.
“One of the warnings in EasyAir is to avoid conducting a mini trial. Regrettably I think the judge, encouraged no doubt by the way the case was argued persuasively by the respondent, allowed himself to be drawn into exactly that…”
The claimant had been the victim of an “authorised push payment” fraud where they were deceived by a fraudster into transferring money (some £700,00 in total) from their account to an account controlled by the fraudster. They brought an action against the bank alleging it owed a duty of care.
THE STRIKING OUT AT FIRST INSTANCE
The bank applied for “reverse summary judgment”. This was successful at first instance.
THE CLAIMANTS’S SUCCESSFUL APPEAL
Lord Justice Birss considered the potential duty owed by the bank in detail. He held that the judge had erred in conducting a “mini trial” of the issues at the application. The proper place for the consideration of the duty of care, and whether it arose in this case, was at trial.
One of the warnings in EasyAir is to avoid conducting a mini trial. Regrettably I think the judge, encouraged no doubt by the way the case was argued persuasively by the respondent, allowed himself to be drawn into exactly that, particularly on the issue of the onerousness or workability of the duty of care contended for. Although the incidence of a duty of care is a matter of law, when duty and standard of care are so closely related as they are here and, in addition, when the court is being asked to decide whether to develop the law or not, these ought to be indicators that the best course is to bring the matter to trial rather than decide aspects of these points on a summary basis. The case bears out the warning in Kyrgyz Mobile that questions of law of this sort are best decided on the basis of actual facts rather than by a summary procedure.
I would allow the appeal. I express my conclusions in two parts. I hold that as a matter of law the duty of care identified in Quincecare, which is a duty on a bank to make inquiries and refrain from acting on a payment instruction in the meantime, does not depend on the fact that the bank is instructed by an agent of the customer of the bank. That is the only legal conclusion necessary to resolve this appeal. It follows from it that it is, therefore, at least possible in principle that a relevant duty of care could arise in the case of a customer instructing their bank to make a payment when that customer is the victim of APP fraud. The second part of my conclusions is that the right occasion on which to decide whether such a duty in fact arises in this case is at trial. Summary judgment in favour of the respondent bank was wrongly entered and should be set aside.