Finance Litigation Legal Eye — winter 2014: bank not liable for CHAPS payment

In Tidal Energy Ltd v Bank of Scotland plc [2013] EWHC 2780 (QB), the court considered whether an instruction to make a payment through CHAPS was properly satisfied where the number and sort code were identified in the instruction, but not the name of the beneficiary.

The claimant, Tidal Energy, was a customer of the defendant, Bank of Scotland. In January 2012, Tidal gave the bank an instruction to make a payment to one of its suppliers in the sum of £217,781.57.

The instruction was given on one of the bank’s standard printed CHAPS transfer forms. The various boxes on the form were completed so as to instruct the bank to pay the sum out of Tidal’s account to account number 13027309 at Barclays Bank with sort code 20-16-12. The receiving customer name was stated as ‘Designcraft Ltd’. Instruction was sent to the bank early on the day it was to be processed and was executed through the CHAPS system the same day…

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