A REMINDER OF HOW CLIENTS CAN USE A VOLUNTARY INDUSTRY CODE AGAINST YOU IF YOU ARE NOT CAREFUL
Current as at 11 May 2015
A recent decision in the case of National Australia Bank Ltd v Rice illustrates the way in which clients can use a voluntary industry code against you if you are not careful.
The case considered whether a guarantor was able to rely on alleged breaches of the Code of Banking Practice by the bank and avoid responsibility under the guarantee or claim damages by way of set off against the bank. The court found that the relevant Code terms were a form of contractual warranty given by the bank to the guarantor giving rise to a damages claim. The bank was found to have breached the Code terms and the guarantor was able to claim damages against the bank.
We have reviewed the case and its potential relevance for the insurance industry Codes.
To request a full summary of the issues email us a request at [email protected]
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