Quincecare Duty of Care



The Banks’ duties are generally limited to those provided under the terms of their contract which includes the Bank’s obligation to repay and disburse the customer’s money in accordance with the customer’s instruction without undue delay.

Nonetheless, due to increasing incidents of bank payment fraud such as the ‘Macau Scam’, the common law has developed to impose a duty of care upon the banks towards their customers to not immediately execute an order for payment in circumstances where any reasonable banker is in fact put on inquiry that it may facilitate a fraud on the customer. Such duty is called the ‘Quincecare Duty’.


The ‘Quincecare Duty’ of care (derives from the English case of Barclays Bank plc v Quincecare Ltd [1992] 4 All ER 363), is the duty of the Bank not to follow a customer’s instructions where the relevant Bank is “put on inquiry” that it may in fact facilitate a fraud on the customer. “Put on inquiry” means, there are reasonable grounds (though not necessarily proof) for believing that the instructions may be an attempt to misappropriate the customers’ funds and requires the bank to (at least) refrain from executing the order.


The ‘Quincecare Duty’ received a lot of traction in recent years in England when it was applied and affirmed by the English Court of Appeal and Supreme Court in the case of Singularis Holdings Ltd (in liquidation) v. Daiwa Capital Markets Europe Ltd [2018] 2 BCLC 1 (CA) and; [2019] UKSC 50 (SC) and the High Court case of Federal Republic of Nigeria v. JP Morgan Chase Bank, NA [2019] EWHC 347.


Originally, the ‘Quincecare Duty’ was framed as a negative duty (i.e. the duty to refrain from following a customer’s instructions), but the recent English Court of Appeal decision in the Federal Republic of Nigeria v. JP Morgan Chase Bank, NA [2019] EWHC 347 has cast greater weight on the role of banks in combatting fraud and expanding the scope of the duty beyond its original formulation to require some form of positive action. 



The courts in Malaysia have also adopted and elucidated the ‘Quincecare Duty’ in a few cases. These case laws have somewhat, cast some light as to the test on what ought to and not to be done by the Banks to safeguard themselves from being held liable for breaching such duty.


The correct test to determine whether such duty shall be imposed is whether a reasonably prudent banker, faced with the same circumstances, would regard the course of action taken on the facts justifiable. This was affirmed in the case of Public Bank Bhd & Anor v. Exporaya Sdn Bhd  [2013] 1 MLJ 507 [CA] and further supported in the recent case of Alliance Bank Malaysia Bhd v Khee San Food Industries Sdn Bhd & Anor [2021] MLJU 1050.


In the case of Perwira Habib Bank (M) Bhd v. Wong Keng Fatt [2014] MLJU 1822 [HC], the court had enumerated a list of the circumstances which amounts to breach of the ‘Quincecare Duty’. Those circumstances are where:

  1. the bank executes the order or instruction knowing it to have been dishonestly given or procured; 
  2. the bank shuts its eyes to the obvious fact of the dishonesty;
  3. the bank acts recklessly in failing to make such inquiries as an honest and reasonable man would make; or
  4. the bank has been ‘put on inquiry’ in the sense that an ordinary prudent banker would have reasonable grounds for believing that there is an attempt to misappropriate money or that there is something otherwise amiss and does not carry out inquiries that were reasonable in the circumstances.


Further, in the case of YATIN MAHMOOD v. MOHD MADZHAR SAPUAN & ORS [2010] 1 LNS 25, the court held that the bank ought to have been ‘put on inquiry’ by the unusual request of eight cash withdrawals of substantial amount within the space of two days. It had breached the ‘Quincecare Duty’ by failing to take any action to prevent the misappropriation of funds and to ensure that the customer’s interest is protected.


On the other hand, in the case of Public Bank Bhd & Anor v. Exporaya Sdn Bhd  [2013] 1 MLJ 507 [CA], the Court of Appeal found that the bank had complied with its duty to exercise reasonable skill and care by pre-emptively freezing the customer’s bank account. The bank had done so after it received a letter from the customer that was contradictory to its earlier request to change the signatories to the bank account.


Therefore, it can be concluded that if a Bank executes an order knowing it to be dishonestly given, or shuts its eyes to an obvious fact of dishonesty, or acted recklessly in failing to disclose any information to its client, the Bank can be held liable. Hence, there is indeed an implied term between the bank and the customer that the bank will observe reasonable professional skill in and about executing customer’s mandate.



Clearly, the Courts in Malaysia have firmly established the banks’ duty to protect customers against fraud. A lapse in perusing a customer’s instructions in situations where the Bank has been put on notice (or should be on notice) of fraudulent activities could lead to it being held liable for the losses occasioned by the fraud.

Therefore, to prevent a breach of its duty, Banks are well advised to ensure there are robust fraud detection and prevention system in place (accompanied by comprehensive “Know Your Client” and “Anti-Money Laundering” protocols) that are to be strictly adhered to.

As such, when the Bank is “put on inquiry” of a suspicious transaction, it must ensure that any follow up enquiry is carried out meaningfully and adequately. The effective implementation of these measures will go a long way in insulating the bank from potential claim by victims of fraud.


Ummi Kalthum Binti Ibrahim