A look back at an important victory obtained before the Orleans Court of Appeal, in which Maitre Mikael Le Bot defended private individuals who had lost everything at first instance. This case highlights the crucial importance of your bank’s duty of care, particularly when dealing with forged cheques.
Orleans Court of Appeal, 27 September 2018, 17/015581
https://www.courdecassation.fr/decision/6253cdacbd3db21cbdd94187
Your Bank Has Obligations: A Victory Against a Forged Cheque
The case concerned Mr and Mrs B., who in September 2014 sold their BMW vehicle for 40,500 euros, paid by bank cheque. Unfortunately, this cheque turned out to be forged, as La Banque Postale, on which it was drawn, refused payment because the issuer’s account had been closed.
Faced with this situation, Mr and Mrs B. brought proceedings against Credit Lyonnais (LCL), their bank, for damages. They argued that Mrs B. had visited an LCL branch before handing over the vehicle to ensure the cheque would be honoured, and that an employee had assured her of its validity, which was incorrect.
An Initial Setback at First Instance
The Blois Regional Court, by a judgment of 4 May 2017, dismissed all of Mr and Mrs B.’s claims. The court found that they had not proved that the bank had breached its duty of care. Mr and Mrs B. were represented by a different solicitor.
The Appeal: We Exposed the Bank’s Failures
Mr and Mrs B. courageously appealed against this decision and decided to change solicitor, engaging Maitre Mikael Le Bot to represent them before the Court of Appeal.
Before the Orleans Court of Appeal, we argued that Credit Lyonnais had failed in its duty to verify the apparent formal regularity of the cheque.
We highlighted several glaring irregularities on the cheque, which should have alerted the bank employee upon deposit, even if Mrs B. had not expressly requested a thorough verification:
- The absence of a “bank cheque” watermark: A bank cheque must bear this highly visible watermark. This one did not.
- An abnormal magnetic line: The cheque’s magnetic line contained four series of digits instead of the usual three, with an added and offset series.
- Traces of scraping and additions: Although less obvious, these traces and additions at the bottom of the cheque should have been detected by a diligent employee after noticing the first two irregularities.
The Court of Appeal was indeed able to “satisfy itself” of these irregularities upon examining the original cheque. It held that the employee, upon noticing the absence of a watermark and the abnormal magnetic line, should have contacted the issuing bank to verify the existence of the cheque.
The Victory on Appeal: LCL’s Liability Established!
The Orleans Court of Appeal ruled in favour of Mr and Mrs B.! It overturned the first-instance decision.
The Court held that Credit Lyonnais had failed in its obligation to verify the regularity of the cheque. This failure caused Mr and Mrs B. a loss of chance. What is a loss of chance? It is the fact that, had they been correctly informed of the cheque’s irregularities, they would not have handed over their vehicle to the buyer.
Consequently, the Court of Appeal ordered Credit Lyonnais to pay Mr and Mrs B. the sum of 38,700 euros in damages (i.e. 96% of losses). This sum represents significant compensation for the loss of chance suffered.
Key Takeaways for You as a Consumer
This decision is excellent news for consumers and highlights fundamental principles:
- Your bank has a duty of care: Even if you do not expressly request a “thorough verification”, the bank, as a professional, has a duty to check the apparent formal regularity of cheques presented to it.
- Visible irregularities must alert the bank: The absence of a watermark, alterations to the magnetic line or traces of scraping are all red flags that the bank cannot ignore.
- Loss of chance is compensable: If the bank’s fault causes you to lose an opportunity (in this case, to avoid the fraud), you can obtain compensation.
If you find yourself in a similar situation, do not hesitate to consult Maitre Mikael Le Bot. Your bank, despite its role as guardian of your deposits, has clear obligations, and this decision of the Orleans Court of Appeal is resounding proof. Justice may take time, but it can prevail against bank failures.
