High Court Dismisses Injunction Application To Prevent Current Account Closure On Grounds Of Financial Crime Concerns

The court found that the bank was contractually entitled to terminate the accounts without notice where it suspected the accounts were being used for criminal or fraudulent purposes

The High Court has dismissed an application by a former customer for an interim mandatory injunction seeking to prevent a bank from closing personal current accounts, alleging, among other things, breach of contract and breach of the Equality Act 2010 for failure to make reasonable adjustments for his disability: Al Yasin v Starling Bank Limited [2025] EWHC 3582 (KB).

Applying the principles governing interim mandatory injunctive relief under American Cyanamid Co (No 1) v Ethicon Ltd [1975] UKHL 1, the court found that there was no serious issue to be tried and that the bank was contractually entitled to terminate the accounts without notice where it suspected the accounts were being used for criminal or fraudulent purposes. The court accepted the bank’s evidence that it had received information from the National Crime Agency (NCA) that a Suspicious Activity Report (SAR) had been submitted in relation to the account, entitling the bank to rely on the termination without notice provision.

The decision highlights the continuing tension between treating customers fairly and complying with anti-money laundering (AML) duties. While AML-regulated firms must avoid discrimination and comply with the Equality Act 2010, those obligations do not displace their duty to report suspicions of money laundering under the Proceeds of Crime Act 2002 (POCA), and regulatory obligations to take steps to mitigate financial crime risks.

The judgment also illustrates the practical difficulties financial institutions face in civil proceedings if they need to explain account closures on the grounds of financial crime concerns. The prohibition on tipping off (s.333A POCA) significantly constrains the information that can be shared with customers and, in some cases, with the civil courts. In the present case, the bank was unable to disclose the existence of the SAR until the eleventh hour. The NCA's guidance on the disclosure of SARs in private civil litigation provides a mechanism for notifying and seeking comfort from the NCA where disclosure of SARs in civil proceedings is contemplated or required to defend claims. In this case, it appears that the bank availed itself of that mechanism before disclosing the SAR to the court. While the NCA cannot provide assurances regarding tipping off or prejudicing an investigation offences (ss.333A and 342 of POCA), in practice, any NCA-sanctioned disclosure will be an effective mitigant against the risk of those offences arising.

Overall, the decision suggests that the English court will be slow to use its interim mandatory injunction powers to interfere with a bank's discretion to terminate an account or customer relationship, where such closure is substantiated by financial crime concerns and exercised in accordance with the bank's contractual rights.

We consider the decision and its implications for financial institutions below.

Background

In December 2024, Starling Bank Limited (Starling) notified one of its customers of an intention to close their two personal current accounts. The customer, who relied on Department for Work and Pensions (DWP) disability payments for his living expenses, sought an injunction to prevent closure alleging that Starling’s actions amounted to breach of contract and breach of the Equality Act 2010. The customer also alleged that Starling had provided false or misleading information to another bank (Halifax), where he attempted to open an alternative account, which was refused. The customer applied for a mandatory injunction against Starling, to prevent the closure of the bank accounts.

Under Starling’s terms and conditions, the bank was entitled to close an account on two months’ written notice. However, Starling had initially given only 28 days' notice, with a subsequent two-week extension — still falling short of the two-month contractual requirement. The bank's terms also permitted immediate termination without notice where it suspected that an account was being used for criminal or fraudulent purposes.

Starling could not disclose the reasons for closure prior to the hearing, referring instead to “regulatory reasons” in correspondence. On the day of the hearing, counsel for the bank informed the court that the bank had received notification from the NCA that a SAR had been submitted in relation to the customer’s account. The court accepted an undertaking from the bank to file and serve a witness statement, verified by a statement of truth confirming this, within 48 hours.

Decision

The court dismissed the customer's application. Applying the American Cyanamid test applicable to the grant of an interim injunction, the court concluded that the customer failed at the first hurdle, as there was no serious issue to be tried (ie there was no reasonable prospect of success on the claim).

Dealing with the prospects of each claim in turn, the court considered first the claim for breach of contract. It ruled that the existence of the SAR provided a sufficient basis for the bank to suspect that the account was being used for criminal or fraudulent purposes. That suspicion entitled the bank, under its terms and conditions, to close the account without notice. In the court’s view, this provided a complete defence to a claim for breach of contract. 

The court observed that it did not have jurisdiction to hear Equality Act claims, which must be brought before the County Court. It nevertheless concluded that the claim had no realistic prospect of success. Of note was the fact that the bank had given the customer additional time to find an alternative account, following the customer's protestations about the effect of the closure of the account, and there was no evidence that he had attempted to open one during the preceding weeks. The court was satisfied that the bank had not failed to make reasonable adjustments and that the account had not been closed because of the customer’s disability, but pursuant to a contractual entitlement exercised in response to financial crime concerns.

The court was not satisfied that there was any evidence to support the allegation that Starling provided misleading information to Halifax (witness evidence filed by the bank confirmed there was no direct provision of information). Instead, the court observed that the restrictions placed on the customer’s account would have been apparent to Halifax during the account transfer process, without any need for direct communication between the banks. That said, had the bank decided to share information directly with Halifax regarding the customer and safeguarding actions taken (eg closing the account), it would likely have been able to avail itself of the information-sharing provisions under the Economic Crime and Corporate Transparency Act 2023, which protect information-sharing between regulated firms from breaching confidentiality obligations and civil liability.

The court also addressed the customer’s concern regarding his access to DWP payments, highlighting the bank’s confirmation that it would allow an anticipated DWP payment to be received and paid out, whether by cheque or into another account. The court noted that the relevant DWP payment had already been made and transferred out of the customer's account to his daughter. Accordingly, the concern and risk in relation to the DWP payment appeared to be "illusory".

On this basis, the court dismissed the application for an interim injunction.

Note: In April 2026, the Court of Appeal refused the claimant's application for permission to appeal.

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