N v RBS: Terminating a banking relationship without notice where money laundering is suspected

On 8 July 2019, the English High Court handed down judgment in proceedings between N and The Royal Bank of Scotland plc ("RBS") ([2019] EWHC 1770 (Comm)).  Following the conclusion of related proceedings brought by the National Crime Agency ("NCA"), the court was required to consider whether RBS had acted lawfully in freezing accounts it held for N and terminating the banking relationship without notice.  The relevant contractual documentation provided for RBS to close a customer's account without notice only where it considered there to be "exceptional circumstances", and allowed it to refuse to process any payment if "in its reasonable opinion it is prudent to do so in the interests of crime prevention".  Such terms, or similar, are standard in banker-customer contracts.

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