Stupid banker cases

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There is a series of what we can only describe as the “stupid banker” cases, which involve bankers negligently paying money to people they didn’t mean to, who then refuse to give it back.

The cases are all quite similar in facts — the boil down to, well, bankers paying money on their customers’ behalves to creditors and later regretting it, but the courts come to wildly different conclusions, and it is quite the epistemological struggle to hold all of them in your head at once. So here is our handy cut-out-and-keep guide.

The following factual variables:

• Where did this happen? Possible answers: New York or the United Kingdom;
• What were the customer’s instructions? Possible answers: do pay the money; definitely do not pay the money; and no particular instruction (so prima facie, do not pay the money, but room for that presumption to be rebutted)
• Was there any indebtedness?: Did the customer owe the bank any thing as a result
• Did the customer actually owe the payee anything? Possible answers: yes and no;
• If the customer did own the payee, when was the debt due? Possible answers: On the day it was actually paid; at some point in the next month at the customer’s discretion (i.e., a normal trade invoice); at a specified date in the future (such as a loan repayment date)

Case	Where	When	Customer’s Instructions	When due?	Authority?	Outcome
Banque Worms	New York	1989	Do NOT pay	Immediately	Not relevant to restitutionary defence.	Payee kept the money
Citibank v Brigade	New York	2021	No instructions	Not till 2023	Ostensible, but not relevant to restitutionary defence.	Payee kept the money
Barclays v Simms	UK	1979	Do NOT pay	Trade invoice	Ostensible, not actual	Payee returned the money
Lloyds v Independent Insurance	UK	1998	Do pay, as soon as I have cleared funds	Immediately	Actual	Payee kept the money.