Banker's Duty of Confidentiality

The banker's duty of confidentiality is a well-established implied contractual term, most authoritatively set out in Tournier v National Provincial and Union Bank of England [1924] 1 KB 461. As the High Court recorded in Primary Group (UK) Ltd v The Royal Bank of Scotland plc [2014] EWHC 1082 (Ch), 'it is common ground that a banker owes his customer a duty of confidentiality', and in Tournier the Court of Appeal considered the scope of that duty, with Bankes LJ holding that 'the duty is a legal one arising out of contract, and that the duty is not absolute but qualified'.

Bankes LJ's judgment in Tournier — quoted and applied in Primary Group — classified the recognised exceptions under four heads: 'On principle I think that the qualifications can be classified under four heads: (a) where disclosure is under compulsion by law; (b) where there is a duty to the public to disclose; (c) where the interests of the bank require disclosure; (d) where the disclosure is made by the express or implied consent of the customer.' A bank issuing proceedings to recover an unpaid overdraft, disclosing the amount owed on the face of the claim, was given by Bankes LJ as a simple example of disclosure justified by the bank's own interests.

In Primary Group, the High Court confirmed that these Tournier exceptions continue to shape modern banking relationships and apply by analogy even outside a strict contractual relationship — for example, to a pre-contractual or equitable duty of confidence — and that where disclosure is not covered by an express contractual term or one of the Tournier exceptions, a bank that discloses customer information to a third party for its own purposes must be able to show the disclosure was reasonably necessary for a permitted purpose, such as obtaining expert advice genuinely required to protect the bank's own interests.