Gatt v Barclays Bank Plc & Anor

A bank may owe its customer a duty of care when supplying credit-reference information. In an appropriate case, that duty may extend to a spouse who is a joint account-holder and whose financial interests are sufficiently proximate and foreseeable. The duty is not breached where the information supplied is accurate and the bank’s automated reporting process is not negligent. Communications within a lawful, reciprocal and regulated financial data-sharing system may attract common-law qualified privilege. The privilege is defeated only by express malice, requiring an improper dominant motive or reckless indifference to truth. A shareholder or spouse cannot recover reflective loss representing losses suffered by companies or another person. A joint-account holder may be liable where the other holder had actual and ostensible authority to incur the relevant borrowing.

The claimant alleged that Barclays and its relationship manager caused inaccurate credit-reference information to be supplied concerning a joint current account held by the claimant and her husband. She claimed breach of contract, negligence or negligent misstatement, and defamation, alleging that the information prevented a remortgage and caused extensive financial loss.

Barclays denied liability and counterclaimed for sums due under a joint loan and the joint current account. The court also considered the claimant’s alternative damages case on the assumption that the credit information had been false or misleading. The central issues were whether the information was inaccurate, whether duties were owed and breached, whether qualified privilege applied, whether the claimant could recover the claimed losses, and whether she was liable for the joint-account borrowing.

1. Liability. The claimant’s claims in contract, negligence and defamation failed. The counterclaim succeeded.
2. Contract and negligence. The reported overdraft limit of £1,500 was accurate. The previously sanctioned higher limit had expired, and no Barclays employee had authorised a continuing higher limit. The claimant’s husband’s discussions with the bank and the bank’s failure immediately to enforce repayment did not convert the borrowing into an authorised overdraft. The letter referring to an agreed overall facility did not amount to an admission that the overdraft was authorised.
3. Applying the principles in Spring v Guardian Assurance [1995] 2 AC 296 and Caparo v Dickman [1990] 2 AC 605, a bank may owe a duty of care in relation to credit information. On these facts, the duty could extend to the claimant as the customer’s spouse, joint account-holder and business associate. It was nevertheless fulfilled because the information was true, was supplied pursuant to the data-sharing arrangements, and the reporting process was not shown to be negligent.
4. Defamation. The publications concerning the husband were capable of being defamatory of him, but the claimant was not identified by them and the words did not bear a defamatory meaning concerning her personally. In any event, the publications were made on occasions of qualified privilege. The reciprocal, mutual and regulated nature of the financial data-sharing scheme distinguished Macintosh v Dunn [1908] AC 390 and brought the case within the principle in London Association for Protection of Trade v Greenlands [1916] 2 AC 15.
5. There was no express malice. The claimant could not establish that Mr Williams personally participated in the publication with the requisite improper state of mind. Negligence alone would not defeat privilege: Horrocks v Lowe [1975] AC 135. The corporate-employee requirement stated in Broadway Approvals v Odhams [1965] 1 WLR 805 was also not satisfied.
6. Loss. In the alternative, the claimed business losses were reflective losses. Under Prudential Assurance v Newman (No 2) [1982] Ch 204, the claimant could not personally recover losses suffered by companies in the group or losses representing her husband’s income. The court also found that the alleged remortgage and subsequent financial recovery had not been established on the balance of probabilities.
7. Counterclaim. The claimant accepted liability under the joint loan. Her husband had actual and ostensible authority to transfer his overdraft into the joint account, so she was liable for sums due under both the joint loan and the overdrawn joint current account.

First-instance decision. No prior appellate decision is stated in the judgment.