Appeal decision erodes banks’ anti-crime tactics
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The Court of Appeal has ruled that bank customers whose transactions are delayed because of money laundering suspicions will have the right to challenge banks’ decisions.
The claim was brought against HSBC Private Bank by Jayesh Shah, who argued that he lost $300m (£191.65m) as a result of the bank’s refusal to transfer $28m to a Geneva account.
HSBC claimed it refused to carry out the request because it suspected Shah of being involved in money laundering. Consequently it was required by UK law to report Shah to the Serious Organised Crime Agency (Soca), which subsequently cleared the transaction.
Last January High Court judge Mr Justice Hamblen rejected Shah’s attempt to bring a claim against the bank, ruling that it had little chance of success. However, Lord Justices Ward, Longmore and Lloyd overturned the decision in a ruling that will allow Shah’s lawyers to attempt to prove that the bank was responsible for the claimant’s loss at a later date.
Fountain Court’s Michael Brindle QC was instructed by Zaiwalla & Co to represent Shah.
Outer Temple Chambers’ Richard Lissack QC was instructed by DLA Piper for the defendant.
