Ejiro has always been has always been a curious final-year law student at Ambrose Alli University, Ekpoma, Edo State. He has always wanted to become a banking and finance legal guru and won't stop asking questions within his sphere of banking and finance. On some days when I am less busy or when he pleases me to indulge him, we discuss the law in both clean English and in pidgin.

After all, I be proper Wafirian. You grab the gist abi?

Recently, he sent me a banking and finance question that falls within the realm of banking and finance et tort.

Thus, he asked: Can a Bank Be Held Liable for Negligence Where the Duty of Care to a Non-customer of the Bank Has Been Breached?

Oh boy! See me see the law question. Well! Let me share my response to him with you. This is for educational purposes only.

In some cases, a bank may be held liable for negligence if it breaches its duty of care to a non-customer.

A duty of care is a legal obligation that requires the bank to act reasonably and prudently in its dealings with customers and non-customers alike.

The specific circumstances of the case will determine whether the bank owes a duty of care to the non-customer and whether that duty has been breached. For example, if the non-customer was harmed because the bank failed to secure its premises or protect sensitive information properly, the bank may be held liable for negligence.

However, it is important to note that the standard of care owed to non-customers may be different than the standard owed to customers. In some cases, the bank may have a lower duty of care to non-customers than it does to customers. Ultimately, the specific facts of each case will determine whether the bank can be held liable for negligence.

In Nigeria, banks can be held liable for negligence where the duty of care to a non-customer has been breached.

The following are some cases wherein the Court decided that a bank can be held liable.

Okwejiminor v. Zenith Bank Plc (2015):

In this case, the plaintiff was a customer of a microfinance bank, and she issued a cheque to a non-customer who presented it at Zenith Bank for payment. The cheque was dishonoured due to a mistake made by the microfinance bank, and the plaintiff sued Zenith Bank for negligence. The court held that Zenith Bank owed a duty of care to the plaintiff, as a non-customer, to ensure that the cheque was properly processed. The bank was found liable for negligence for failing to exercise reasonable care in processing the cheque.

Eze v. Diamond Bank Plc (2013):

In this case, the plaintiff was a non-customer of Diamond Bank who was attacked and robbed while using an ATM machine located outside the bank's premises. The plaintiff sued the bank for negligence, claiming that the bank had a duty of care to protect her from harm while using the ATM. The court held that the bank owed a duty of care to the plaintiff as a non-customer and that it had breached that duty by failing to provide adequate security at the ATM. The bank was found liable for negligence and ordered to pay damages to the plaintiff.

Adeyemi v. First Bank of Nigeria Plc (2008):

In this case, the plaintiff was a non-customer who was defrauded by someone who had opened an account at First Bank using false documents. The plaintiff sued the bank for negligence, claiming that it had a duty of care to ensure that its account-opening procedures were adequate to prevent fraud. The court held that the bank owed a duty of care to the plaintiff as a non-customer and that it had breached that duty by failing to verify the identity of the account holder properly. The bank was found liable for negligence and ordered to pay damages to the plaintiff.

These cases show that banks in Nigeria can be held liable for negligence where the duty of care to a non-customer has been breached. However, each case will turn on its specific facts, and it is important to consult with a legal professional to determine whether a bank can be held liable in a particular situation.

In Nigeria, a bank can be held liable for negligence where the duty of care to a non-customer has been breached. There have been several cases where banks have been held liable for negligence in their dealings with non-customers. Here are a few examples:

Jumbo v. Ecobank Nigeria Plc:

In this case, a non-customer of Ecobank Nigeria Plc was defrauded of his money by an Ecobank customer who used the bank's facilities to commit fraud. The non-customer sued Ecobank for negligence, alleging that the bank failed to take reasonable steps to prevent the fraud. The court held that the bank owed a duty of care to the non-customer and that it breached that duty by failing to properly verify the identity of its customer before allowing him to open an account. The court awarded damages to the non-customer.

Oyinlola v. Union Bank of Nigeria Plc:

In this case, a non-customer of Union Bank of Nigeria Plc was injured on the bank's premises due to a faulty escalator. The non-customer sued the bank for negligence, alleging that the bank failed to maintain the escalator properly. The court held that the bank owed a duty of care to the non-customer and that it breached that duty by failing to maintain the escalator properly. The court awarded damages to the non-customer.

Azubuike v. Access Bank Plc:

In this case, a non-customer of Access Bank Plc was injured by a falling ATM machine that was located outside the bank's premises. The non-customer sued the bank for negligence, alleging that the bank failed to properly secure the ATM machine. The court held that the bank owed a duty of care to the non-customer and that it breached that duty by failing to properly secure the ATM machine. The court awarded damages to the non-customer.

These cases illustrate that banks in Nigeria can be held liable for negligence where the duty of care to a non-customer has been breached. The specific circumstances of each case will determine whether the bank owed a duty of care to the non-customer and whether that duty was breached.

Let's see more recent cases and with the influx of fraud

If any bank has been sued recently??

Because I think banks have taken every necessary step to avoid paying for damages

That's y one would be defrauded and the bank will only tell you sorry ko

Nice insights.

What would you say in this scenario;
A bank advised an inward Letter of Credit (LC)to their exporter customer. This exporters exports goods on the strength of this LC and transmits shipping documents to the bank. The bank forwards the documents to the LC (foreign) issuing bank as the LC dictates.

Somehow, the cargo is cleared without payment. After investigation, the supposed issuing bank confirms that they did not issue the LC. The local bank denied responsibility even though their letter stated that the LC has been authenticated by them.

With this scenario and the duty of care principle, do you think the bank here is liable or not?

Connoisseur:
Nice insights.

What would you say in this scenario;
A bank advised an inward Letter of Credit (LC)to their exporter customer. This exporter exports goods on the strength of this LC and transmits shipping documents to the bank. The bank forwards the documents to the LC (foreign) issuing bank as the LC dictates.

Somehow, the cargo is cleared without payment. After investigation, the supposed issuing bank confirmed that they did not issue the LC. The local bank denied responsibility even though their letter stated that the LC had been authenticated by them.

With this scenario and the duty of care principle, do you think the bank here is liable or not?

Your question is quite confusing. If I may ask, where is the location of the bank issuing the Letter of Credit?

Do you per-chance mean that a local bank issued an LC in favour of the importer for the benefit of the Exporter's bank (Foreign)?

Kindly clarify.

Thanks

jaeyking:
Let's see more recent cases and with the influx of fraud

If any bank has been sued recently??

Because I think banks have taken every necessary step to avoid paying for damages

That's y one would be defrauded and the bank will only tell you sorry ko

The law states that any money a customer keeps with the bank is a loan to the bank, and the bank has a duty to protect that money.

Hence, you have cases of " authorized access and debit of a customer's account" against a bank.

Once a customer can show that he/she wasn't negligent in any way or manner in allowing third parties access to funds kept with a bank, the bank is presumed liable in cases of authorized access to such a customer's deposit.

dalitigator:


Your question is quite confusing. If I may ask, where is the location of the bank issuing the Letter of Credit?

The LC was issued by a foreign bank (Italian) bank listing my company as beneficiary.

Do you per-chance mean that a local bank issued an LC in favour of the importer for the benefit of the Exporter's bank (Foreign)?

I am an exporter. The LC was issued in our favour. It's an inward Letter of Credit.

Kindly clarify.

Thanks

Connoisseur:

The LC was issued by a foreign bank (Italian) bank listing my company as beneficiary.

And the Nigeria bank confirmed it but failed to settle same without a content or compelling reason? If yes, then the Nigeria bank is liable. But then it depends on available facts.