Legal update: Bank negligent in providing inaccurate reference of player’s creditworthiness to casino

20 August 2014

(1) Playboy Club London ltd (2) London Clubs International Ltd (3)Burlington Street Services Ltd v Banca Nazionale Del Lavoro Lavoro Spa [2014] EWHC 2613


When X arrived in London he applied for a cheque-cashing facility in order to play in the Playboy Club London Limited (“the Club”). The Club sought a reference as to X's creditworthiness. To preserve customer confidentiality, the Club made the request through a related company, the third claimant (S). The reference request was addressed to the manager of Banca Nazionale di Lavoro SPA (“the Bank”). A response, purporting to be from one of the Bank's employees (G), stated that X had an account and was trustworthy to the extent of £1.6 million in any one week. In fact, X's balance had always been nil.

The Club had seen G's business card which stated that she was in business development. X drew down on cheques equivalent to £1.25 million and gambled at the casino. When the Club attempted to cash the cheques they were unpaid, being altered photocopies of cheques issued to another customer.

X returned to Lebanon and attempts to recover the money were unsuccessful. The Bank did not admit providing the reference, observed that the reference was on out-of-date letterhead and stated its belief that G had not had the authority to grant it.

The Club issued a claim against the Bank for alleged negligence in providing the reference.

The main issues were as follows:

  • Did the Bank send the reference and is it responsible for its contents?
  • Did the Bank owe a duty of care to the Club?
  • Did the Bank breach that duty?
  • Did that breach cause the Club’s losses?
  • If so, what loss had the Club suffered and should any award be reduced on grounds of contributory negligence?


The Court found that the Bank had been negligent in preparing the reference. The Club's acceptance of forged cheques from the player had not been sufficient to break the chain of causation, but it was contributorily negligent in failing to make a slightly more careful examination.

Regarding the first issue, the Court found that the verification report confirmed that the reference came from the Bank's fax number and bore G's signature. The out-of-date letterhead would not have put an outside reader on guard. G’s role in "business development" connoted a degree of executive as opposed to routine activity. It was therefore reasonable for the Club to expect that G had the appropriate level of clearance. There was no reason for the Club to be cautious when the reply came from an employee apparently responsible for X's account rather than the manager.

The instant case involved a routine request for a bank reference which was answered without any attempt to restrict liability to the enquirer or at all. It did not matter that the request was carried out by another member of the same group of companies. There was no suggestion that the reference would not have been given or would have taken a different form if sought by the Club directly. Concealing the Club's identity was for the benefit of some players and not to hide unlawful or improper activity. There was no reason to restrict the legal duty to the person actually making the enquiry.

The Court went on to say that the Bank could not have exercised reasonable care and skill in preparing a reference stating that X was capable of meeting a financial commitment of up to £1.6 million in any one week when his balance had always been nil. It had breached its duty of care.

The Club was not negligent in failing to take steps to ascertain X's creditworthiness when granting the cheque-cashing facility. The Club had no reason to cautiously accept the cheques; it had understandably relied on the reference.

By Katie Allard, Paralegal, Dispute Resolution

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