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 [2004]. 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.
The Court held that, where a claimant obtains a freezing order in relation to a defendant’s assets, a bank will owe a duty of care in implementing the terms of the order to the claimant from the time the bank receives notification of the order. If the bank is negligent, it will be liable to the claimant for any damage that the claimant suffers as a result, subject to the usual tests of remoteness and foreseeability.
