High Court allows claim based on retrieval duty of sending bank in instances of APP fraud

In Dawn Barclay-Ross v Starling Bank Limited [2025] EWHC 2158 (KB), the High Court allowed part of a claim by a litigant in person to proceed on the basis that, in instances of Authorised Push Payment (APP) fraud, a sending bank may owe a ‘retrieval duty’ to a victim. This duty might include seeking that victim’s instructions once the bank is aware of the fraud and attempting to retrieve a victim’s funds with due care and skill.

As this decision was in response to an application to strike out the claim, the Court was only required to determine if such a claim was arguable. However, the Court’s recognition that such a duty might exist has potential implications for the legal obligations owed by sending banks to the victims of APP fraud and the operational procedures they may need to put in place to fulfil those obligations.

Background

The claimant was an individual customer of the defendant bank, holding two personal current accounts with them. Between May and June 2024, the claimant made a series of payments from these accounts to a third-party account with a bank based in the US.

In July 2024, the claimant asked the defendant to stop the payments, having discovered that the entity which held the US account was “fake”. The defendant contacted the receiving bank, requesting the payments to be returned, and made three recall requests to a UK-based intermediary payment services provider which had been used for some transfers, but was unable to recover the money.

The claimant issued proceedings in March 2025 on the grounds that the defendant: (i) had negligently handled the attempts to recover her payments; (ii) was in breach of the Contingent Reimbursement Model (CRM) code; and (iii) was in breach of principle 6 of the FCA handbook. The defendant applied to have the claim struck out.

Court’s decision

The Court struck out various parts of the claimant’s claim. First, the alleged breach of the CRM Code was struck out as the Court ruled that it applies to payments between GBP-nominated, UK-domiciled accounts, which was not the case here. Secondly, the alleged breach of principle 6 of the FCA handbook was struck out as it is not actionable by private individuals. Thirdly, the claim for damages for distress, inconvenience and emotional harm was bad in law and was bound to fail. The Court also found that the particulars of claim were unsatisfactory as they were not compliant with Civil Procedure Rule 16, did not state the contractual or tortious duties allegedly breached, did not plead essential facts in detail, and did not properly plead matters of quantum.

However, the Court ruled that the claimant’s “essential case”, which related to the acts or omissions of the defendant in seeking to recover the lost funds, should not be struck out in its entirety. The Court acknowledged that, if re-pleaded properly, there may be an arguable allegation that the defendant breached its contractual and tortious duties to execute its mandate with due care and skill by failing to seek the claimant’s instructions to recover the money paid once notified of the fraudulent activity. The Court based this element of its ruling on the decision in Philipp v Barclays Bank UK PLC [2023] UKSC 25, in which the Supreme Court recognised that the existence of this type of retrieval duty was at least arguable to the strike-out standard. The correct measure of damages would be the loss of a chance to recover some or all of the money. The claimant was therefore given permission to re-plead this element of her claim.

Key takeaways

The High Court’s acknowledgement that a sending bank may owe a victim of APP fraud a duty to act with due care and skill in its recovery efforts marks a significant development of the obligations which retail banks may owe their customers. Such a claim is yet to be tested at trial, but the finding of such a ‘retrieval duty’ could have significant consequences for how retail banks are required to respond to instances of APP fraud: seeking a customer’s instructions and moving with sufficient speed could be key.

With thanks to Zeynep Tavsanli for her assistance in preparing this post.