Santander UK PLC v CCP Graduate School Limited – clarifying the retrieval duty

In our previous article, we considered the judgment in CCP Graduate School Ltd v National Westminster Bank PLC & Anor EWHC 581 (KB), where Master Brown explored the concept of a 'retrieval duty' for receiving banks. On 25 March 2025, Justice Jennifer Eady DBE ruled, that CCP's case had no real prospect of success. She clarified that Santander, as the receiving bank, did not assume responsibility for the third-party fraud victim and emphasised that a bank's duty of retrieval to its own customer does not extend to third parties. 

Background

CCP's claim arose from an authorised push payment (APP) fraud, where CCP was induced to make 15 payments from its account with NatWest into an account at Santander held by PGW Consultants Limited. A total of £415,909.67 was transferred between 13 September and 12 October 2016. Shortly after receipt, the fraudsters transferred the payments out of the account to various other accounts held with different banks.

Master Brown's First Instance Decision

Master Brown dismissed the claim against NatWest but allowed CCP's argument of a 'retrieval duty' against Santander to proceed, citing existing pleadings and uncertainty regarding such duty's applicability to banks involved in fraudulent activities. The central question was whether a tortious duty of retrieval could arise in relation to the receiving bank when the paying party (the victim of the fraud) was not a customer of that bank. This case highlighted the uncertainty surrounding the novel 'retrieval duty,' despite Philipp v Barclays [2023] UKSC 25 (Philipp) providing clarity on the Quincecare duty.

Appeal

On appeal, Santander argued that it was an error of law to find it arguable that it owed a duty of care to CCP. Santander contended that Master Brown should have found there was no real prospect of CCP succeeding on its claim, emphasising that an assumption of responsibility was a necessary element of a tortious claim for pure economic loss.

Justice Jennifer Eady DBE ruled that CCP’s case had no real prospect of success. The Court clarified that a receiving bank, such as Santander, cannot be assumed to have responsibility to the third-party victim of fraud, as the bank's obligation is to comply with its customer's instructions. There was no basis for a duty upon a bank to reverse payment orders properly made on the instructions of its own customer. Banks' willingness to assist fraud victims does not create a legal obligation to do so, as such a duty would place an unacceptable burden on banks.

Comment

The unresolved issue in Philipp was whether Barclays owed (and was in breach of) any contractual duty to its own customer after the fraud had been discovered for not taking adequate steps to recover the money transferred to the UAE: The judge at first instance expressed strong doubts about the argument, but then considered that there were "too may imponderables" to decide that issue on paper.

The decision in Santander was that this does not justify the development of a similar tortious duty towards third parties with whom the bank has no contractual relationship. Imposing such a duty would, be overstepping the boundaries between the judiciary's role and that of legislators and regulators. The decision underlines the limitations of tortious duties in the context of banking and fraud recovery.

APP fraud is a devastating crime. In 2023, the losses in the UK from APP fraud were reported to be £341 million. Most cases originate online. This continues to be complex and evolving landscape. The new mandatory reimbursement framework introduced in October 2024 for APP fraud provided a measure of protection to individuals, microenterprises and charities.

In the long term, self-education about fraud tactics, how best to protect yourself and staying vigilant can provide a measure of protection. If you have been the victim of a fraud, our three top tips are:

1. Report the fraud immediately – both to your bank and Action Fraud (the UK's national fraud and cybercrime reporting centre, which can provide guidance and support). The quicker you act, the better the chances are of recovering money
2. Document everything, including communications and transactions relating to the fraud, and
3. Seek legal advice from a solicitor specialising in fraud cases so that they can help you to understand the best course of action to take.