Who’s Liable? – a conundrum


Here’s a puzzler that occurred to me the other day. Through the wonders of online banking, we increasingly take on tasks that were once only carried out by bank employees. We set up standing orders, arrange funds transfers, cancel Direct Debits, and so on.

This is a win-win situation. We can experience the liberating effects of doing our banking at any time and anywhere.  The banks get the freedom to close branches and shed staff so that they can maximise their profits. They can then choose whether to pass on their savings to their customers, or build shiny new offices.

This is where the conundrum arises. If you manage to find a branch that’s still open, and ask one of the handful of remaining staff to transfer funds for you, a strange circumstance will come into being. If the employee makes an error and sends £100,000 of your money into a black hole, they may be in some trouble with their employer but they will not be expected to reimburse you out of their own pocket. The bank will be held responsible, because it has vicarious liability for the actions of its staff. It would also be expected to demonstrate that it had trained that particular employee properly

Now, if you are sitting at home with your laptop, acting in the role of that employee to save the bank money, and make the identical mistake, you will be liable for every penny and the bank will have no responsibility at all. This is so even if the bank has given you no training. Oh, of course, they don’t train you, do they?

I don’t mean giving you a page of FAQs to read. I mean the sort of training where some attempt is made to see if the trainee has acquired the necessary knowledge and skills.

So two operators carry out exactly the same transaction and make exactly the same mistake. One is liable for the loss and the other is not. Strange isn’t it? it’s even stranger that we’re all comfortable with this arrangement.


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