A Quincecare derivation: new recovery option for scam victims

Use of a derivative action on behalf of the shell company that received the funds may assist claimants seeking recourse against payment service providers that facilitate APP fraud. Denis O'Connor examines a recent case.

Denis O'Connor is a fellow of both the Institute of Chartered Accountants in England & Wales and the Chartered Institute of Securities and Investment. He was a member of the British Bankers' Association Money Laundering Committee from 2003-10 and a member of the Joint Money Laundering Steering Group's board and editorial panel between 2010 and 2016. He has been a frequent speaker at industry conferences on financial crime issues, both in the United Kingdom and abroad.

The High Court has recently granted scam victims a new option for recovering their funds in a development of the Quincecare duty. The Court gave two scam victims permission to seek to claim, and then upheld the claim, for the recovery of stolen monies from a payment service provider (PSP) who had paid away the funds from a corporate account and to reinstate those funds to that account. [1]