More than 40 years after its formulation in the leading case of Hedley Byrne & Co Ltd v. Heller & Partners Ltd (“Hedley Byrne”),1 “assumption of responsibility” remains a concept that has yet to be fully developed and articulated with clarity. Indeed, until the House of Lords gave judgment in Customs & Excise Commissioners v. Barclays Bank Plc (“Barclays”),2 it was unclear whether assumption of responsibility was to be treated as any “concept” at all. A majority of the Court of Appeal in the same case3 took the view that assumption of responsibility was best conceived of as a mere label to be attached by the court once a tortious duty of care had been established, and not as a test in its own right. The House of Lords, by contrast, was intent to retain the utility of assumption of responsibility as a practical test and sought to inject some much-needed clarity into the concept. However, the attempt to allow assumption of responsibility to stand on its own two feet is threatened by the presence of an extremely narrow test for “reliance”.

The facts in Barclays are deceptively simple. The Customs & Excise Commissioners had been seeking VAT payments of £2.3 million and £3.9m from Brightstar Systems Ltd and Doveblue Ltd respectively and, in independent proceedings, secured freezing injunctions for £1.8m in relation to Brightstar and the full £3.9m in relation to Doveblue. The Commissioners served copies of the relevant freezing orders on Barclays Bank, where the relevant accounts were held, but in both cases, due to “operator error”, Barclays permitted the two debtor companies to make substantial payments out of their accounts. Barclays had issued standard letters to the Commissioners explaining that they would comply with the terms of the orders and requesting remuneration (£150) for their costs so incurred, but the letters were not received by the Commissioners until after the payments had been made. When the Commissioners subsequently obtained judgment in default for £2.3m against Brightstar and for £3.9m against Doveblue, third party debt orders against the relevant accounts yielded only £500,000 and £130,000 respectively. The question arose whether Barclays owed a duty in tort not to cause the Commissioners economic loss by allowing the post-court order payments to be made.