The Emergence Of The Mareva By Letter

This is a summary of an article previously published in Business Law International, Vol 12 No 2, May 2011, and is reproduced in its amended form by kind permission of the International Bar Association, London, UK. © International Bar Association 2011.

Recent Canadian judicial decisions have established that a bank owes a duty of care to non-customers once it has actual knowledge of, or is willfully blind to, the use of its services for fraudulent purposes. In Ontario in particular, the possibility is still open that a bank may owe such a duty even where it does not have actual knowledge (or is not willfully blind or reckless to the existence) of a fraud.

A similar recognition of a duty financial institutions have to third party victims when it is put on notice of fraud can be seen in decisions emanating from American, English, and Swiss courts. The emergence of this duty increases the viability of the extra-judicial mechanism commonly referred to as a Mareva