Banking and Finance: Cold comfort
The Court of Appeal's decision in the landmark Brightstar case has highlighted the need for banks to review their procedures for dealing with freezing orders. Jon Holland and Jonathan Leach analyse the judgment and outline some of the steps which banks and others might consider taking in order to avoid falling foul of its scope
A recent Court of Appeal judgment has raised an issue concerning freezing orders that goes ‘to the very heart of the law of negligence’. As a result, banks and other third parties regularly faced with freezing orders will need to assess their procedures in light of the judgment of the Court of Appeal in Commissioners of Customs and Excise v Barclays Bank PLC . In the main judgment, Justice Longmore endorsed Justice Colman’s comment at first instance, that the point in issue was “… hitherto unexplored and undecided …” and one which went “… to the very heart of the law of negligence …”. As a result, in order to address the particular issue before it, the Court considered the complex question of the correct approach to be adopted in determining whether to extend the limits of negligence in a novel situation.
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