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Negligence - Court sets test for determining when an investment transaction moves from execution only to one involving advice
19 September 2011
On 2nd September 2011 the High Court considered when a bank moved from an execution only transaction for a customer to one in which the bank provided advice. The case involved a gentleman who had made an investment at a loss. He sued HSBC for the loss on the basis of negligent advice. The bank contended that it was an execution only transaction and involved no advice as to the nature of the investment - in essence the bank argued it made no recommendation. However, the Court found that the salient issue to determine was whether the information provided by the bank was accompanied by either a comment or value judgment on the relevance of that information to the client's investment decision, or was itself the result of a process of selection involving a value judgment so that the information would tend to influence the customers's decision. In both situations the advice carried the character of a recommendation for which a duty of care was owed in law.
See ADRIAN RUBENSTEIN v HSBC BANK PLC [2011] EWHC 2304 (QB)
If you wish to discuss any bad advice you have received on a financial product or investment, which you believe has led to a loss, please do conduct our Litigation Team for a free exploratory discussion.
Andrew Petchey, Partner, Litigation
