Two recent High Court cases have considered a bank’s duties to its customers in the context of giving advice. All such cases are highly fact sensitive, however the starting point remains that in the absence of a contractual basis for the duty to advise, it will take exceptional circumstances for a bank to assume a duty in tort.
In the Finch case a commercial customer, with financial and legal advisors engaged, alleged the bank had breached its duty to advise the customer under both contract and tort, specifically in relation to the terms of a break clause in a fixed rate loan. The Court concluded that there was no contractual duty, either express or implied, for the bank to advise the customer. The Judge also held that there was no assumed duty in tort and that it would require exceptional circumstances for a bank to be under a duty to advise, particularly in circumstances where the bank may be acting contrary to its commercial interests in providing that advice. The claim against the bank accordingly failed.
In the O’Hare case the bank provided investment recommendations as to various financial instruments over the course of more than a decade. The investments included the bank’s products and products from other banks. The Court unsurprisingly held that there was a duty in both contract and tort to advise. On the facts however the Court held that the bank had not breached its duty and the claim failed. The Judge noted that the duty of care in relation to investment advice was a balance between the bank sometimes having to save the customer from themselves and the customer taking responsibility for investment decisions, including poor decisions.
The ultimate outcome of both cases will be of no surprise for those routinely involved in the financial services industry. However, given that every case turns on its own facts, there remains the need for banks to be vigilant that they do not inadvertently assume a duty to advise, especially in long running customer relationships.
 Finch and another v Lloyds TSB plc and others  EWHC 1236 (QB)
 O’Hare and another v Coutts & Co  EWHC 2224 (QB)