Larsson vs Revolut Limited

This case involved Kenneth Larsson's claim against Revolut Limited for losses incurred due to an authorised push payment fraud, raising issues of contractual and tortious duties, as well as dishonest assistance.

TLDR:

• Mr Larsson was defrauded into transferring CHF 466,617.73 to fraudulent accounts.
• He claimed Revolut failed to prevent the fraud, breaching contractual and tortious duties.
• Revolut applied for strike out or summary judgment on all claims.
• The High Court struck out the claims in contract and tort, but allowed the dishonest assistance claim to proceed, subject to amendment.

The claimant, Kenneth Larsson, was defrauded into transferring CHF 466,617.73 to five accounts at Revolut Limited, believing he was purchasing shares in a non-existent entity. The fraudsters convinced him that the accounts were in his name and that transferring funds to these accounts would safeguard his investment.

Larsson made five transfers from his UBS account in Switzerland to the fraudulent accounts between July 12 and August 2, 2022. The accounts were opened under different names, but the SWIFT messages identified Larsson as the beneficiary, creating inconsistencies Revolut allegedly ignored.

Larsson claimed Revolut breached its contractual and tortious duties by failing to detect and prevent the fraud. He also alleged unjust enrichment and dishonest assistance in a breach of trust. Revolut sought to strike out these claims or obtain summary judgment.

The court examined whether Revolut owed a duty of care to Larsson as an electronic money institution, akin to a bank's duty. The judge found no contractual or tortious duty existed, as Revolut was not acting on Larsson's instructions and had no obligation to police account openings or manage transfers to accounts not held by Larsson.

However, the court allowed the dishonest assistance claim to proceed, subject to Larsson amending his pleadings to clarify the existence and breach of a trust, and Revolut's role in assisting that breach. The judge emphasized that proving dishonesty would be challenging but possible.

The decision highlights the complexities of fraud cases involving electronic money institutions and the limitations of their duties compared to traditional banks. It also underscores the importance of clear pleadings in claims of dishonest assistance.

Legal representatives: Patrick Green KC and Arnold Ayoo (instructed by Keystone Law) for the claimant, Anthony Pavlovich (instructed by Eversheds Sutherland (International) LLP) for the defendant.

Judicial Panel: Mr Justice Zacaroli

Case Citation Reference: [2024] EWHC 1287 (Ch)