- Bank under no duty to give voluntary advice (Finch v Lloyds TSB Bank)
- Practical implications
- Did the bank owe an advisory obligation in contract?
- Did the bank owe an advisory duty in tort?
- Court details
Dispute Resolution analysis: The High Court has dismissed claims brought by assignees of a borrower that a bank breached its duty of care in failing to advise the borrower as to the existence of an onerous term (connected with early repayment) in its loan facility. The judge declined to accept that a contractual duty to advise arose, either under the common law generally or by implication under section 13 of the Sale of Goods and Services Act 1982 (SGSA 1982). He also declined to find that the bank had owed a tortious duty of care, confirming that a bank is not under a general legal obligation to provide advice (but if it gives advice then it must do so using reasonable care and skill) and applying the three-fold test for determining whether or not a duty exists in any particular situation (citing Springwell Navigation and Ceylon Petroleum). In the instant case, it was asserted that the bank should have voluntarily offered advice in relation to the offer of its product. The borrower had also been represented throughout by brokers and lawyers. To find the existence of a tortious duty of care in such circumstances would be to 'go further than any of the authorities cited' and would negative the general principle.
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