No duty owed by bank to third party for negligent misstatement

The Supreme Court has held that a bank was not liable to a casino (Playboy Club) for a negligent credit reference it supplied for a customer to Playboy Club’s agent.

This was because the bank was not aware that the reference would be passed on to Playboy Club, and as a result there was no assumption of responsibility to them.


In Banca Nazionale del Lavoro SPA v Playboy Club [2018] UKSC 43, Playboy Club sought a reference from the bank for a gambler before granting him a credit facility. Playboy Club obtained the reference via a third party. The bank was unware that the reference would be communicated to, and relied on, by Playboy Club (rather than the party who requested the reference). In reliance on the credit reference, Playboy Club allowed the gambler to draw cheques to the value of £1.25 million.

In fact, the credit reference turned out to be unreliable. The gambler only became a customer of the bank two days after the reference was provided. The cheques were returned unpaid, resulting in a substantial loss to Playboy Club.

The judgment goes through the case law on negligent misstatement. The Court held that there was a lack of any express or implied indication that the reference would be relied upon by, or was for the benefit of, another party.

Whilst the bank did owe a duty of care to Playboy Club’s agent, it had not assumed any responsibility to Playboy Club as the undisclosed principal because:

…the representation was, objectively, requested by [the third party] alone and, objectively, confined in its making to [the third party]”.

In order for there to have been sufficient proximity, the request by the third party agent needed to state it was for the benefit of someone else, even if that person or group of people was unnamed. The court had some sympathy for Playboy Club and Lord Mance described the bank as very lucky to avoid liability. But they concluded that there was no assumption of responsibility to Playboy Club.


A party’s voluntary assumption of responsibility remains the foundation for this area of law, as held in the recent Supreme Court decision in NRAM Ltd v Steel [2018] 1 WLR 1190. The courts are wary of imposing a duty of care on a party unless there has been a voluntary assumption of responsibility to an identifiable person or group of persons. 

This decision means that banks facing claims from third parties (to whom they did not assume any responsibility) will not be found liable.

The bank’s reference also made it clear that the information was given in strict confidence. Where banks do provide credit references to third parties, they should ensure they explicitly state that no responsibility is accepted to third parties.  

If you would like to discuss this case in further detail, please contact Sam McCollum or Richard Hayllar.

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at August 2018. Specific advice should be sought for specific cases. For more information see our terms & conditions.


Date published

03 August 2018


View all