The gamble that didn't pay off - Casino loses appeal in UK Supreme Court

On 26 July 2018 the UK Supreme Court unanimously dismissed an appeal against our client, Banca Nazionale del Lavoro SPA (BNL), upholding the judgment of the Court of Appeal that, on these facts, there is no duty of care for negligent misstatement to an undisclosed principal.

Banca Nazionale del Lavoro SPA (Respondent) v Playboy Club London Limited and others (Appellants) [2018] UKSC 43

Summary of the Supreme Court's decision

Whilst the facts of the case are novel (see below), the Supreme Court confirmed that the   principles established by the seminal cases of Hedley Byrne v Heller [1964] AC 465 and Caparo v Dickman [1990] 2 AC 605 regarding a duty of care for negligent misstatement are firmly rooted in the defendant's voluntary assumption of responsibility towards the claimant. The extent of this duty of care is to an "an identifiable person or group of persons, and not to the world at large or to a wholly indeterminate group". Therefore the duty of care cannot extend to an undisclosed principal.

The Club's "ingenious" submission (per Lord Mance at paragraph 26) which tried to extend the liability in contract to an undisclosed principal to tort, in circumstances that were said to be akin to contract (save for consideration), failed.

Facts of the case

In October 2010 HB decided to visit the London Playboy Club (the "Club") to gamble. In order to do this he applied for a cheque cashing facility of up to £800,000. The rules of the Club stated that in order to gamble the Club required a credit reference from his bankers for twice the amount of the facility. However, it was not the Club's practice to ask for the reference; instead it used an associated company called Burlington Street Services Ltd ("Burlington") to do so. HB stated that the reference should be obtained from his bank, BNL. BNL confirmed to Burlington that HB had an account with it and that he was trustworthy up to the figure of £1.6million in any one week.

In reliance on the reference HB was

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