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Duty of care to protect customers? Legal and practical considerations for lenders

Customers in a bank Print publication

17/07/2019

Walker Morris risk series stampSocial and commercial context

Reports of violence on the high street are on the rise. Unfortunately, even the briefest of internet research reveals a worrying number of incidences of violence in the UK.  Within just the last year there have been: a stabbing in a supermarket; armed robberies at Barclays on Vauxhall Bridge Road, at Cambridgeshire Building Society in Sawston and at a Clydesdale Bank in Glasgow; a lethal knife attack on Harlesden High Street; separate killings, knife attacks, boiling water and acid attacks on shopping streets in Colchester; violence, gun crime, drugs and prostitution forcing businesses to close in Swansea High Street; and armed robbery at a Co-op store in Greater Manchester, to mention but a few.

Figures reported by The British Retail Consortium (BRC) show some 2,500 incidents of verbal abuse and anti-social behaviour, and 600 violent incidents (one in four of which involved a knife, gun or another weapon) across the retail industry as a whole.  With the risk of robbery being greater for banks and building societies, the issue of violence on the high street is perhaps of even more importance for retail financial services firms.

Why is this case important?

Most major lenders will be well versed in the vital work that is needed to protect their employees and premises. However, the recent case of Al Najar & Ors v The Cumberland Hotel (London) [1] (the shocking case in which three sisters were brutally attacked at the former Cumberland Hotel) gives rise to additional concerns for lenders, and indeed for any business inviting customers or guests into its premises, because it considers the extent to which such businesses owe a duty of care to protect their customers.

What can retail lenders do?

As is explained in more detail below, the High Court concluded in this case that a business owes a duty to invited guests/customers to take reasonable care to protect against injury caused by the criminal acts of third parties.

The increasing incidences of violence on the high street and the current focus of the Government and retail industry bodies on this disturbing trend [2], not to mention the greater risk of robbery, mean that it is likely, were the question to arise in a case in the retail financial services context (as opposed to the hospitality context of the Cumberland Hotel case), a court would find that the risk of violence to staff and/or customers would be reasonably foreseeable.

The key for responsible retail lenders will therefore be to ensure that they take sufficient steps to safeguard not only their staff, but also their customers. Such measures as are appropriate will differ from lender to lender, and potentially even from branch to branch, but they could (non-exhaustively) include:

  • undertaking detailed and regular security/risk assessments;
  • implementing such, policies/procedures and security measures as are necessary to address any risks identified
  • keeping such policies/procedures and measures under review and up-to-date and ensuring that they are followed at all times (perhaps by undertaking random spot-checks)
  • ensuring that security staff are properly trained or qualified as appropriate, and that all training and qualifications are kept up-to-date and under review
  • ensuring that security equipment is up-to-date and in full working order at all times
  • ensuring that all other staff are trained so as to be alive to the risks of violence to staff and customers, and that they are aware of security measures and procedures to be followed in the event of any incident
  • implementing, and ensuring that all staff are aware of and use, a reporting system for incidences of violence or related matters.

Cumberland Hotel case: Cause for concern

In this case the attacker accessed the hotel room of three sisters and carried out a theft and violent hammer attack, inflicting critical and permanent injuries on all three sisters. The sisters took legal action alleging that the hotel’s security had been insufficient.  The High Court considered whether a business owes a duty to invited guests (or, by analogy, to any customers) to take reasonable care to protect against injury caused by the criminal acts of third parties; and concluded that it did.

The High Court undertook an up-to-date review of the circumstances in which the law of England and Wales may impose liability arising from omissions (such as, here, an omission to take steps to prevent the danger of a theft and violent attack). The court decided that the correct approach was to apply the ‘omissions principle’ identified by the Supreme Court in the 2018 case of Robinson v Chief Constable of West Yorkshire [3], namely: “In the tort of negligence, a person A is not under a duty to take care to prevent harm occurring to person B through a source of danger not created by A unless (i) A has assumed a responsibility to protect B from that danger, (ii) A has done something which prevents another from protecting B from that danger, (iii) A has a special level of control over that source of danger, or (iv) A’s status creates an obligation to protect B from that danger.”  It concluded that, by inviting guests to stay, a hotel assumes a responsibility to protect guests from danger as per (i) above.

A duty of care can, therefore, arise. Again by analogy, a duty of care could potentially also arise on the part of banks, building societies, financial advice firms, shops, bars, restaurants, cinemas, theatres, arenas, local authorities or indeed any business which invites guests or customers into its premises.

In this particular case, however, the hotel escaped liability overall, as the High Court decided that security was taken seriously at the hotel and that the hotel did take reasonable care to protect its guests. The hotel was not, therefore, in breach of its duty.

Next steps

Walker Morris will monitor and report on any key legal and practical issues arising from the rise in violence on the high street. In addition if, as they have threatened, the sisters pursue an appeal of this decision against the former Cumberland Hotel, we will report on the outcome.

In the meantime, however, if you require any further information, or if you would like any assistance and advice which can be tailored to the needs of your business, please do not hesitate to contact Louise Power, or any member of Walker Morris’ Banking & Finance Litigation Team.

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[1] [2019] EWHC 1593 (QB)
[2] A group of retail industry representatives has signed an open letter urging the UK Government to do more to tackle rising levels of violence and abuse towards shop workers. The letter has been published to coincide with the Government’s call for evidence into violence and abuse towards shop staff.
[3] [2018] UKSC 4, see para. 34

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