The Court of Appeal of Athens, in its recent decision No. 4177/2022, attributed gross negligence to a bank which, through an employee, proceeded with a transfer of funds from the plaintiff’s account to the account of a third party, without taking all necessary identification measures at the time the transfer instruction was given.
Specifically, according to the case’s background, when the plaintiffs and account holders discovered a transfer of €26,000 from their account to an unknown third party’s account, with whom they had no transaction or other relationship, they disputed the said transaction. Upon contacting the bank, the latter informed them that it had received a written transfer instruction via email, allegedly signed by the account holders, requesting the transfer of the said amount to the third party’s account.
The first instance court ordered a handwriting expert examination, which showed that the instruction was forged and did not originate from the account holders themselves. Following this, the court ruled that the transfer instruction was given by an unknown third party who had intercepted the plaintiffs’ email address and other information to create the forged document.
The bank, which executed the transaction through its authorized employee, was found grossly negligent by the court for failing to take all necessary measures to verify the true identity of the person requesting the transfer (e.g., by making telephone or other forms of contact with the account holders before executing the transfer). The court further noted that since it is now very common for transfer instructions to be given via email or similar electronic means, the bank must organize its activities so as to ensure proper identification of the instructing party and to exclude or minimize the risk of transferring funds to a non-entitled party. Since due diligence was not exercised in this case, the bank bears responsibility for the payment of the amount to the non-entitled third party.
Finally, the appellate court confirmed the first instance court’s position that no compensation for moral damages is owed in this case, as the bank’s liability is purely contractual, deriving from their atypical deposit agreement, for which the law does not provide for moral damage compensation.
