UK: BANK ENTITLED TO TERMINATE ITS RELATIONSHIP WITHOUT NOTICE WHERE TAINTED BY CRIMINALITY

On 30th September, Mayer Brown published an article about a recent High Court case which, in a helpful precedent for banks, held that concerns that an authorised payment institution’s customer sub-accounts were vulnerable to being used for fraud and money laundering constituted “exceptional circumstances”, thus entitling a bank under the terms of its customer contract to terminate the banking relationship without notice.  It is said that, while turning on the particular facts of the case, it clarifies that where a range of options are available to the bank regarding how to proceed with the banking relationship in such circumstances, all of which may be reasonable and rational, the fact that the bank chooses in good faith to take one course of action (here closing the account) rather than another does not create a cause of action for the customer.

https://www.mayerbrown.com/en/perspectives-events/publications/2019/09/bank-entitled-to-terminate-its-relationship-without-notice

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Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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