An English common law obligation on banks to exercise care and skill when transferring a customer’s funds may apply in Australian courts as a way for the victims of fraud to recover their money. Law firm Ironbridge Legal has released a paper on the Quincecare duty of care and its relevance in Australia in the context of banking relationships. Ironbridge says: “The law, as it stands, supports the notion that customers who transfer funds to fraudsters may recover from their bank under the same [Quincecare] duty.” The duty was established in a 1992 case, Barclays Bank Plc v Quincecare Ltd, which was heard by the High Court of England and Wales. The court ruled that a bank should refrain from executing a transaction if, and for as long as, the bank has reasonable grounds for believing that the transaction is an attempt to misappropriate the funds of its customer. “The duty arises in the context of a banker-customer relationship under an implied term of the contract or under the law of negligence,” Ironbridge said. The duty has been affirmed in a number of cases since then, including a Hong Kong case this year involving Citibank NA and an Indonesian company PT Asuransi Tugu Pratama.  In that case, the Hong Kong Final Appeal Court ruled that if there are features of a transaction apparent to the bank that indicate wrongdoing or fraud, an inquiry must be undertaken. Factors that might give rise to reasonable grounds for believing a transaction is an attempt to misappropriate funds include the transfer of an unusually large amount of money, the need for prompt transfer, the presence of unusual features in the transaction, the location of the receiving bank and the bank’s knowledge of the parties. The Quincecare duty has been cited in Australian cases. In a 1995 case, Sansom v Westpac Banking Corp, the New South Wales Court of appeal used it as precedent in answering the question of whether Westpac was in breach of its duty to a customer. The original Quincecare case involved a transaction arranged by an agent of the account holder, and there is debate about whether the scope of the duty extends to instructions given by the actual customer. Ironbridge’s view is that “where the bank has reasonable grounds for believing that funds are being misappropriated and fails to make inquiries about the legitimacy of the transfer but rather executes it, the bank may be liable to compensate the customers for its loss. “As compliance requirements, fraud detection programs and AI improve, there may be greater scope for demonstrating that the bank was in fact on notice.”