As an expert in Principles of Banking Law with over 20 years in the Ghanaian banking sector, including senior compliance and risk management roles at banks like Stanbic Bank Ghana, I apply tort law principles to banking contexts, such as banker liability under negligence, aligned with Ghana’s common law system and Bank of Ghana (BoG) directives like the Corporate Governance Directive 2018, which emphasizes duty of care in operations to prevent losses from events like the 2017-2019 banking cleanup. Below, I address each part with practical banking examples, referencing key cases for depth.

(a) Under the law of torts, what is a duty of care?

A duty of care in tort law refers to the legal obligation imposed on an individual or entity to adhere to a standard of reasonable care while performing acts that could foreseeably harm others. It forms the foundation of negligence claims, requiring that one must act as a reasonable person would in similar circumstances to avoid causing injury or loss. In banking, this duty is owed by banks to customers, e.g., in providing accurate financial advice or safeguarding deposits, as breaches can lead to claims for economic loss. This principle stems from the landmark case Donoghue v Stevenson (1932), where Lord Atkin established the “Neighbour principle”: you must take reasonable care to avoid acts or omissions likely to injure your Neighbour (those closely affected by your actions). In Ghanaian banking, this is practically applied in scenarios like erroneous fund transfers, where failure to verify details could breach the duty, potentially violating BoG’s operational risk standards under Basel II/III adaptations.

What factors may impose the duty of care? (5 marks)

Several factors determine whether a duty of care is imposed in tort, ensuring it’s not unlimited but based on foreseeability, proximity, and policy considerations:

• Foreseeability of Harm: If harm to the plaintiff is reasonably foreseeable from the defendant’s actions, a duty arises. For instance, in banking, advising a customer on investments without due diligence foresees potential financial loss, as in Caparo Industries plc v Dickman (1990), which refined the test to include foreseeability.
• Proximity Between Parties: There must be a close and direct relationship, such as banker-customer in Ghana, where banks owe a duty in confidential dealings, per Hedley Byrne & Co Ltd v Heller & Partners Ltd (1964), extending to economic loss from negligent misstatements.
• Fair, Just, and Reasonable: Courts consider if imposing duty is equitable, weighing public policy. In Ghana, post-2017 cleanup, BoG encourages this to promote trust, but limits it to avoid overburdening banks, e.g., no duty to third parties unless proximate, as in collapses like UT Bank due to governance lapses.
• Special Relationships or Assumptions of Responsibility: In banking, contractual ties or fiduciary roles (e.g., trustees) impose duty, reinforced by BoG’s Cyber and Information Security Directive 2020 for data protection.

These factors ensure balanced application, aiding banks in compliance and risk mitigation for sustainable operations.

(b) Discuss the following defenses available to the defendant in an action for Tort (10 marks total, 5 marks each):

a) Volenti Non Fit Injuria

Volenti non fit injuria (“to a willing person, no injury is done”) is a complete defence where the plaintiff voluntarily assumes the risk of harm, consenting to the defendant’s actions with full knowledge. It bars recovery if proven, but requires explicit or implied consent without duress. In banking torts, e.g., a customer signing a waiver for high-risk investments acknowledges volatility, absolving the bank if losses occur from market fluctuations, provided advice was transparent. Key case: Smith v Baker & Sons (1891), where mere knowledge of risk didn’t imply consent; contrast ICI Ltd v Shatwell (1965), where workers’ deliberate risk-taking invoked volenti. In Ghana, this applies to digital banking risks under the Payment Systems and Services Act, 2019 (Act 987), where users consent to terms, but courts scrutinize for fairness, especially post-DDEP where investors assumed bond restructuring risks. Practically, banks use clear disclaimers in contracts to invoke this, enhancing ethical practices and reducing litigation.

b) Contributory Negligence

Contributory negligence is a partial defense where the plaintiff’s own negligence contributes to the harm, reducing damages proportionally rather than barring the claim entirely (under modern law). In Ghana, per the common law and equity, courts apportion liability based on fault degree, as in the Apportionment of Loss Act. For example, if a customer fails to report unauthorized transactions promptly, contributing to fraud losses, the bank’s liability for negligence (e.g., weak security) might be reduced by 50%, aligning with BoG’s emphasis on shared responsibility in cyber risks. Landmark case: Butterfield v Forrester (1809) originated it, but Davies v Mann (1842) evolved to last opportunity rule; today, Sayers v Harlow UDC (1958) illustrates apportionment. In post-2024 recovery, this defense helps banks in claims from the 2022-2024 DDEP, where customers’ failure to diversify portfolios contributed to losses, promoting accountability and aligning with BoG’s sustainable banking principles for resilient sector.