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ARTICLE · 04 AUGUST 2005

Bank Catches Cold from Freezing Orders

Mishcon de Reya LLP
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Where a bank has been notified that a customer's account is the subject of a freezing order and yet allows money to be withdrawn from that account in breach of the order, the bank can be held liable in negligence to the party that has obtained the order

United KingdomFinance and Banking
Gary Miller
Gary Miller
Kathryn Garbett
Kathryn Garbett
Jeremy Hertzog
Jeremy Hertzog
Dan Morrison
Dan Morrison
Kas Nouroozi
Kas Nouroozi

The Principle

Where a bank has been notified that a customer's account is the subject of a freezing order and yet allows money to be withdrawn from that account in breach of the order, the bank can be held liable in negligence to the party that has obtained the order.

The Case

Earlier this year the Court of Appeal ruled that Barclays Bank (the Bank) owed a duty of care to the Commissioners of Customs and Excise (the Claimant) after the Claimant served freezing orders on the Bank in relation to two of its customers' accounts (Commissioners of Customs and Excise v Barclays Bank PLC [2004] EWCA (Civ) 1555; [2004] All ER (D) 343 Nov). The Bank's duty was to take care that the funds in such accounts were not dissipated in breach of the freezing orders.

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