Privy Council shakes up fraud law: “awareness” of misrepresentation no longer required

In the recent Bermudan case of Credit Suisse Life (Bermuda) Ltd v Ivanishvili [2025] UKPC 53, the Privy Council held that claimants no longer need to prove conscious awareness of a misrepresentation in fraudulent misrepresentation claims, a shift which moves the focus from the claimant’s state of mind to the wrongdoer’s conduct.

This decision represents a significant development in the law of deceit and may have far-reaching implications across common law jurisdictions.

What has changed?

Historically, English courts have treated conscious awareness of a misrepresentation as an essential element of reliance in a deceit claim. In recent English law cases, including Leeds City Council v Barclays Bank plc [2021][1] and Loreley Financing (Jersey) No 30 Ltd v Credit Suisse Securities (Europe) Ltd [2023][2], the courts expressly followed this line of reasoning and considered awareness of the representation as an essential and distinct element of the claim. In practical terms, if the claimant did not actively recognise the representation at the time of contracting, the claim would fail.

In Credit Suisse Life (Bermuda) Ltd v Ivanishvili [2025], the Privy Council has now adopted a different approach. It held that conscious awareness is not required. A person may rely on a representation, including an implied representation, without ever consciously recognising it. In this particular case, the Privy Council held that Mr Ivanishvili relied on the fraudulent misrepresentation by Credit Suisse - that his accounts would be managed properly and not fraudulently - without consciously being aware of this representation (i.e. by recognising it and thinking about it pro-actively) at the time of entering into the agreement with Credit Suisse. Rather, it was an unconscious assumption that influenced his decision making. This reasoning shifts the focus of liability to the wrongdoer’s conduct and intention rather than the psychological state of the victim.

The reasoning behind the shift

Lord Leggatt, delivering the judgment, returned to first principles and asked what it means to deceive someone. His view was that the essence of deceit lies in inducing belief in a false representation. That process does not require conscious awareness by the victim. Individuals act on unconscious assumptions constantly in everyday life (for example, a waiter trusts that a customer has the means to pay for any food ordered without consciously considering the implied representation). Exploiting such assumptions can amount to fraud even if the victim never mentally registers the representation.

The Privy Council therefore reasoned that imposing an awareness requirement would create arbitrary distinctions between express and implied representations and undermine the protective function of deceit. Wrongdoers could deliberately exploit implicit expectations without liability, which the law should not permit.

Why does this matter?

Although the case arose under Bermudan law, the Privy Council concluded expressly that: “under the law of England and Wales and of Bermuda it is not a legal requirement of a claim for deceit that the claimant was aware of the representation or understood it to have been made.”[3] Its reasoning will, therefore, be highly persuasive in England and Wales. While English courts may refine its application, litigants will undoubtedly seek to rely on this decision. Practical consequences include:

• For claimants: A significant evidential hurdle may have been removed. Proving reliance arguably no longer require proof of awareness, making claims easier in complex transactions where assumptions operate silently.
• For defendants: Exposure to liability may increase. Implied representations arising from silence, institutional context or conduct may now ground deceit claims even where the claimant never consciously considered them.
• For advisers: Litigation strategy will need recalibration. Pleadings and evidence may focus more on the existence and falsity of the representation and its causal effect, rather than the claimant’s mental state.

In summary

The Privy Council has shifted the focus of deceit from the victim’s awareness to the wrongdoer’s conduct. If adopted in England, this could transform fraudulent misrepresentation claims by removing a key evidential barrier and expanding potential liability. 

“It is an everyday feature of human experience that people form and act on beliefs without any conscious awareness or thought. If someone takes advantage of such unconscious mental processes to deceive another person and cause her to act to her detriment, there is no reason why a claim for damages should not lie. The mischief is no less than in a case involving conscious awareness.” (Lord Leggatt, para 162, Credit Suisse Life (Bermuda) Ltd v Ivanishvili [2025] UKPC 53)

https://jcpc.uk/uploads/jcpc_2024_0022_0035_judgment_7bcd2fdec1.pdf