Bank not liable for credit reference

Posted: 15th January 2013

A property developer who claimed that she was ruined by a poor credit reference from her bank has lost her High Court claim for more than £3 million in damages. The court rejected her plea that the reference, which described the current account she held with her husband as ‘delinquent’, was defamatory and amounted to a breach of contract and a negligent misstatement.

ConstructionThe claimant had argued that Barclays Bank Plc. had wrongly told credit reference agencies that the £260,000 overdraft on the account was over the agreed limit, thus destroying her and her husband’s credit rating with the foreseeable result that further finance was refused by lenders and their business collapsed. They also lost their £4 million home and other assets.

The court ruled that the couple, who had lived a prosperous lifestyle, had borrowed beyond their means and that their development business would have been unlikely to survive the property crash in an event. The overdraft limit on the account had been only £1,500 at the relevant time and the information that Barclays had provided to credit reference agencies under lawful and long-standing data-sharing arrangements had been ‘true and not misleading’.

The court allowed a counterclaim by Barclays for the repayment by the claimant of £847,287 in outstanding loans and overdrafts, as well as £80,000 in legal costs. The claimant’s argument that the money advanced represented her husband’s personal borrowings which had been attributed to her without her consent was rejected. The claimant’s husband had originally also been a claimant in the case but his cause of action had been purchased by the bank from his trustee in bankruptcy and subsequently discontinued.