Deceit, awareness and the Ivanishvili decision

The decision of the Privy Council in Credit Suisse Life (Bermuda) Ltd v. Ivanishvili [2025] UKPC 53 handed down at the end of November 2025 has provided welcome clarity as to the question of the level of awareness that is required in claims of deceit.  

Representations can be made in a number of different ways, through words and/or conduct; they can be express and implied. In order to succeed in a claim for fraudulent misrepresentation, the claimant must prove that: 

• The defendant made a representation of fact (or law)
• The representation was false
• The defendant does not believe the representation to be true
• The defendant intended the representation to be believed by the claimant
• The representation caused the claimant to believe that the representation is true. 

A relatively recent line of cases added what might be considered a ‘gloss’ to the above-listed elements. The clearest expression of this ‘gloss’ came from the case of Marme Inversiones 2007 SL v. NatWest Markets plc [2019] EWHC 366 (Comm), (at paras 278-286), in which Picken J. found that the claimant “should have given some contemporaneous conscious thought to the fact that some representations were being impliedly made” (para 286). 

This requirement, however, did not sit well with a line of older cases from higher authority. These included: 

• The Director of Public Prosecutions v. Ray [1974] AC 370. In this case, Mr Ray walked into a Chinese restaurant and ordered a prawn chop suey and rice. In placing this order, he impliedly represented to the waiter that he was intending to pay the 47 pence which the meal cost.  This representation turned out to be false when he left the restaurant without paying and Mr Ray was subsequently found guilty of dishonestly obtaining a pecuniary advantage by deception (on the basis of reasoning that would apply to deceit).
• Similarly, when all five Spice Girls posed for a photoshoot and approved the promotional material for Aprilia scooters, they were held to have represented that all band members were going to remain in the band. This representation was false because Gerri Halliwell had in fact already decided to leave the band (Spice Girls Ltd v. Aprilia World Service BV [2002] EWCA Civ 15).
• Finally, in the case of Gordon v. Selico Ltd (1986) 18 HLR 219, the defendant was found to have deliberately covered up the dry rot so that the claimant, a prospective buyer, would not see it. This was found to be deceit.  

In each of the above cases, it would be difficult to argue that the claimant “gave contemporaneous conscious thought” to the representation as it was being made. Indeed, in the case of Gordon, the claimant was not even aware that a representation was being made at all. 

In the case of Leeds City Council v. Barclays Bank plc [2021] EWHC 363 (Comm), Cockerill J. (as she then was) tried to reconcile these two lines of case law. She found, on the basis of the Marme line of cases, that there is “some requirement of awareness”. 

She faced, however, the difficulty that in the DPP v. Ray line of cases listed above, the element of awareness looked very much like an assumption. It was difficult to argue that the waiter in the Chinese restaurant had really given “contemporaneous conscious thought” to the representation made by the customer in placing an order. 

She found that the awareness in the case of the waiter was a “quasi-automatic understanding”. This she found to be different from an assumption – although she had to admit that the dividing line between the two might be “thin to non-existent”, stating: “there will however be cases where the element of awareness will come very close to something which might loosely […] be characterized as assumption […] the dividing line between giving contemporaneous conscious thought to the conduct and contemporaneous conscious thought to the representation may, in some cases, be thin to non-existent.”

While Cockerill J. clearly struggled to reconcile these lines of cases, she ultimately felt bound to follow the established precedent in cases with a similar fact pattern to the Leeds case. Given the opportunity to revisit this reasoning in the case of Loreley Financing (Jersey) No 30 Ltd v. Credit Suisse Securities (Europe) Ltd [2023] EWHC 2759 (Comm), she did not. 

In considering the required level of awareness of representations, the Privy Council did not try to reconcile the two existing lines of case law. The Privy Council found that either the DPP v. Ray line of cases were wrongly decided, or there is no requirement in law for a contemporaneous awareness and understanding of the representation. 

The Privy Council decided that the ‘gloss’ adopted in the Marme line of cases was wrong and there is no need for a contemporaneous awareness and understanding of the representation, finding (at para 153) that: “The claimant is aware of the defendant’s conduct. But there is no separate awareness of a representation that the defendant intends and has the means to pay for the service or goods which he or she is impliedly offering to purchase. The claimant’s belief that this is so does not just look like an assumption. That is exactly what it is.”  

Defendant’s arguments dismantled

The various arguments put forward by defendants to justify the need for the contemporary consciousness through ‘gloss’ were squarely rejected by the Privy Council. 

Defendants have argued that a claimant cannot be said to have relied upon a representation, when it was not even aware that the representation was being made. This question did not trouble the Privy Council, which concluded that the reliance element of the representation, while essential, can be met by showing that (1) the representation caused the claimant to hold a false belief (“reliance in belief”) and (2) the claimant, holding that false belief, must have acted so as to suffer loss (“reliance in action”). 

As the Privy Council concludes (at para 162): “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.”

Defendants have urged courts not to elide assumption and representation. The Privy Council had no compunction to point out that this is a false dichotomy. When a defendant exploits an unconscious assumption of the claimant in circumstances where such assumption has been caused by the conduct of the defendant, the defendant can be found liable. 

Finally, defendants would also no doubt argue that allowing a misrepresentation claim to proceed on the basis of an assumption – particularly where that assumption is as to the honesty of the defendant – makes misrepresentation indistinguishable from a claim for non-disclosure. As we know, non-disclosure is not actionable, save for in specific circumstances, so this distinction is important. There again, the Privy Council maintained that claims in misrepresentation and non-disclosure can be distinguished by reference to the actions of the defendant (rather than by reference to the awareness of the claimant). If the defendant’s conduct has caused the claimant to hold a false belief and act on it, this is an actionable misrepresentation. A claim for non-disclosure would not involve the defendant taking such positive action. 

Implications for litigators

Allowing reliance on an assumption dismantles what had become an almost insurmountable hurdle for claimants in deceit cases. It was virtually impossible to prove that a claimant had a “contemporaneous conscious awareness” of an implied representation made in circumstances where the defendant was purposefully hiding the facts from the claimant. As well as being frustrating for claimants, this did not sit well with a sense of natural justice.

The Privy Council judgment makes claims in deceit - particularly those based upon an implied representation - easier for claimants to mount, and in many cases, possible once again. 

There may also be significant implications for similar types of action, including securities litigation claims under s. 90A of FSMA where shareholders have suffered losses as a result of untrue or misleading statements made to the market. While not entirely settled law, it is likely that the requirement for reliance under s. 90A will apply the common law test for the tort of deceit (see for example, Allianz Funds Multi-Strategy Trust v. Barclays Bank plc [2024] EWHC 2710 (Ch)). The Privy Council judgment makes it more straightforward for claimants to bring these claims. 

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