A)  What is Contributory Negligence?

Contributory negligence is a defense in the law of tort under Ghanaian common law (influenced by English principles via the Courts Act, 1993), where a plaintiff’s (claimant’s) own negligence contributes to the harm suffered, leading to a reduction or complete bar of damages awarded against the defendant.

• Key Elements: It requires proving: (1) the defendant owed a duty of care; (2) the defendant breached it; (3) the breach caused damage; but (4) the plaintiff also failed to take reasonable care for their own safety, contributing to the loss. In Ghana, the Contributory Negligence Act, 1962 (Act 146) allows apportionment of damages based on fault degree, unlike the old common law total bar.
• Practical Application in Banking: Banks often invoke this in negligence claims, e.g., if a customer sues for losses from unauthorized transactions due to bank error, but the customer shared PINs (breaching duty under BoG’s Cyber and Information Security Directive 2020). For instance, in a phishing scam, if the bank failed to detect fraud but the customer ignored security warnings, damages might be reduced 50-50. Real-world: During the 2017-2019 banking cleanup, customers of collapsed banks like Capital Bank claimed negligence in governance; BoG reports noted contributory factors like customers ignoring red flags on high-risk investments.
• Implications for Banks: This promotes ethical practices; banks train staff on duty of care (e.g., under Basel II operational risk standards adapted in Ghana) to minimize claims, while advising customers on vigilance for mutual protection. In modern digital banking (e.g., mobile apps at Ecobank Ghana), clear terms reduce contributory negligence disputes, aiding profitability and compliance.

B) Two Instances Where a Bank May Commit the Tort of Conversion

Conversion is a tort involving wrongful interference with another’s chattels (personal property) by dealing with them in a manner inconsistent with the owner’s rights, leading to liability for the full value. In banking, this often arises with negotiable instruments or customer property.

• Instance 1: Paying on a Forged or Unauthorized Endorsement: If a bank pays out on a cheque with a forged endorsement, it converts the cheque, as it wrongfully assumes dominion over the instrument. For example, under the Bills of Exchange Act, 1961 (Act 55) in Ghana, a bank collecting payment for a customer without good title (e.g., stolen cheque) commits conversion. Practically, this occurred in historical cases like the collapse of UT Bank, where poor cheque verification led to losses; BoG’s directives on payment systems (under Act 987) now mandate enhanced due diligence to avoid such torts.
• Instance 2: Wrongful Retention or Disposal of Customer’s Securities: A bank holding securities as collateral (e.g., shares or bonds) commits conversion if it sells them without authority or refuses to return them upon loan repayment. This interferes with the customer’s possession rights. In Ghanaian practice, seen in lending disputes post-DDEP (2022-2024), where banks like Stanbic Bank Ghana faced claims for prematurely realizing securities amid liquidity crises. The Banks and Specialized Deposit-Taking Institutions Act, 2016 (Act 930) requires proper notice, but failure leads to vicarious liability for the bank.

Banks mitigate via clear safe custody agreements and adherence to BoG’s Liquidity Risk Management Guidelines, ensuring ethical handling for resilience.