It is already generally accepted that, because of the special function they hold, banks have a duty of care. This duty of care aims to protect individuals and companies against light financial decisions.

The social function and expertise as a foundation for the banking duty of care

Banks have expertise in the field of financial services and financial products. Based on this expertise and their important social function, the banks have a duty of care. Two forms are distinguished in the banking duty of care:

  • the general duty of care; and
  • the special duty of care.

General duty of care

The general duty of care for banks is enshrined in the Financial Supervision Act. This law ensures careful (financial) services and obliges banks to act in the interest of the customer. A bank is therefore obliged to take everything in consideration before making a decision with an impact on the customer.

Banks must draw up a customer profile based on their financial position, knowledge, experience, objectives and risk appetite. The services and products offered and advised by the banks must fit within this customer profile. The customer must be able to properly assess financial products and financial services on the basis of information provided by the banks. Violating this law can lead to civil liability for banks.

Special duty of care

The special duty of care for banks applies in situations in which banks must protect consumers and businesses against the risks of financial products or investments. The special duty of care applies:

  • (i) in the pre-contractual phase,
  • (ii) in the contractual phase and
  • (iii) after termination of the service.

Moreover, the special duty of care extends not only to customers, but also to third parties. The scope and interpretation of the special duty of care depends on the circumstances of the case. Relevant circumstances are the complexity of and the risks associated with the relevant financial product, as well as the knowledge, experience and financial position of the customer.

Violation of the duty of care

If the bank has breached its duty of care, the customer may (among other things) dissolve or annul the underlying agreement. In addition, the customer can possibly hold the bank liable for compensation. The damage must then be attributable to the bank and have a causal connection with the standard that the bank has violated.

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Would you like more information, do you have a dispute with your bank or do you believe that your bank has breached its duty of care? VIOTTA Advocaten has a lot of experience with (the prevention of) proceedings against banks. Please contact corporate law attorney Dirk de Waard | +31202480602.

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