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The Credit Suisse judgment has significant implications for claims in deceit.

By Oliver Middleton, Anna Kullmann, and Duncan Graves

Key Points:

  • This landmark judgment confirms the legal requirements for a claim in deceit.
  •  Claimants do not need to prove their conscious awareness or understanding of a representation (although they still must prove that the representation induced them to contract).

On 24 November 2025, the Judicial Committee of the Privy Council handed down judgment in Credit Suisse Life (Bermuda) Ltd v. Bidzina Ivanishvili [2025] UKPC 53. The judgment makes a significant contribution to the law of misrepresentation by clarifying that there is no requirement that a claimant be consciously aware of or understand the representation made to it by a defendant.

Background

Credit Suisse Life (Bermuda) Ltd (CS Life) is a Bermuda insurance company, and a subsidiary of Credit Suisse AG (CS Bank). BidzinaIvanishvili is the former Prime Minister of Georgia.

Mr Ivanishvili had, since 2005, invested considerable sums with CS Bank. In 2011 and 2012, CS Bank advised Mr Ivanishvili to make a further investment into two life insurance policies, placed with CS Life. The policies were unconventional, and operated as a form of investment fund managed by CS Bank for the benefit of the policyholder. The policyholder would pay a premium to CS Life and the premium would then be allocated to a separate segregated account. CS Bank would invest this premium on either a discretionary or non-discretionary basis.

In September 2015, Mr Ivanishvili discovered that his relationship manager at CS Bank, Patrice Lescaudron, had been dealing fraudulently with the policy assets. Mr Ivanishvili (with members of his family and two companies also named as policyholders) brought proceedings in Bermuda against CS Life for damages arising from breach of contract, breach of fiduciary duty, and fraudulent misrepresentation. This blog post focuses on the claim relating to fraudulent misrepresentation.

The Fraudulent Misrepresentation Claim

To succeed in a fraudulent misrepresentation claim, the claimant must show that (i) the defendant made a false (implied or express) representation to the claimant, (ii) the defendant knew that the representation was false or was reckless as to whether it was true or false (iii) the defendant intended the claimant to rely on the misrepresentation, and (iv) the claimant did rely on the misrepresentation and suffered loss as a consequence.1

It was held at first instance that, by recommending the life insurance policies, Mr Lescaudron impliedly represented that CS Bank was not managing, and did not intend to manage, the assets fraudulently. These implied representations were false and were intended to induce Mr Ivanishvili to enter into the policies.2 The Bermuda Court of Appeal affirmed these findings, but held that the misrepresentation claim failed because (among other things) there was no evidence that Mr Ivanishvili, at the time of contracting, had any conscious awareness or understanding of these representations. It was, therefore, not possible for Mr Ivanishvili to have relied upon them.3

The dispute before the Privy Council related to whether the claim in misrepresentation should fail on the basis that Mr Ivanishvili was not consciously aware, at the time of contracting, that Mr Lescaudron was making these implied representations. The issue was argued on the basis that the relevant Bermudian law is the same as the law of England and Wales.4

Judgment

The Privy Council held there is no requirement that, for a misrepresentation to be actionable, the claimant must be aware of, or must understand, the false representations made to it.5

The alleged requirement for awareness or understanding emanated from Raiffeisen Zentralbank Österreich AG v. Royal Bank of Scotland plc [2010] EWHC 1392 (Comm), and had been endorsed in several subsequent financial misselling cases. However, the requirement was misconceived and stemmed from three false assumptions.

Reliance and Awareness

First, following Raiffeisen, courts over the past 15 years had considered that reliance on a representation is never possible without conscious awareness of that representation.

However, reliance requires only that the claimant holds and acts on a false belief produced by a misrepresentation. This requires the misrepresentation to operate on the claimant’s mind, but it does not require the claimant to be consciously aware of the representation at the point that it acts upon it. In the words of the Privy Council:“It is an everyday feature of human experience that people form and act on beliefs without any conscious awareness or thought.”6

By way of example, in Spice Girls Ltd v. Aprilia World Service BV, an earlier case relied upon by the claimants in Credit Suisse, the Spice Girls contracted with a company to publicise that company’s products. In doing so, the group impliedly represented that it did not know that any member of the group had declared an intention to leave (which would prevent the contract from being performed). This implied representation operated on the mind of the company and was relied upon, even though there was no conscious consideration or awareness at the time of contracting of what representations were to be implied into the pop group’s conduct.7

Reliance and Assumptions

Second, courts had incorrectly thought that a distinction needs to be drawn between cases in which the claimant relies on a representation and cases in which the claimant acts on an assumption.

This is, however, a false dichotomy. A claimant can act both on an assumption founded unconsciously on a representation and in reliance on that representation. The important question is “whether the claimant has acted on an assumption…which the claimant would naturally be expected to make in response to the defendant’s words or actions.”8 In this respect, a defendant who causes a claimant to act on an assumption is just as liable in deceit as in the case of a defendant whose representations operate on a claimant’s conscious mind.

Representations and Non-disclosure

Third, it had been thought that requiring awareness of the representation is necessary in order to preserve the distinction between misrepresentation and non-disclosure. This distinction is important because non-disclosure does not generally give rise to liability, save (for example) in cases involving contracts of the utmost good faith,9 or where there is a fiduciary relationship between the parties.10

However the distinction between misrepresentation and non-disclosure “depends entirely on what the defendant has or has not done and not at all on the claimant’s awareness or understanding of acts done by the defendant.”11 A defendant who does something (such as deliberately concealing a material fact)12 in order to cause the claimant to hold a false belief may be liable in misrepresentation. This is distinct from a case in which the defendant simply fails to inform the claimant of a material fact or to correct a false belief which the claimant independently holds. The line is not always easy to draw, but in the Privy Council’s judgment: “The seller who takes active steps to conceal a defect in order that a buyer should not discover it stands in a very different position from the seller who is aware of a defect not apparent to the buyer but does nothing actively to hide it.”13

Takeaways

Credit Suisse makes a significant contribution to the law of misrepresentation. The judgment may expand the instances in which a successful claim in misrepresentation can be made. A buyer will often be aware of express representations. But a buyer will less frequently consciously turn its mind to implied representations, such as an implied representation that accounts provided in connection with a share sale can be relied upon to present a true picture of a company’s financial position.14 Now that the law on reliance has been clarified, claimants will not need to prove their conscious awareness of an implied representation (although they still must prove that the representation induced them to contract).

This post was prepared with the assistance of Conor Hay in the London office of Latham & Watkins.

  1. See, for example, Eco 3 Capital Limited v. Ludsin Overseas Limited [2013] EWCA Civ 413, at [77]. ↩︎
  2. [2022] SC (Bda) 19 Civ. ↩︎
  3. [2023] CA (Bda) 13 Civ. ↩︎
  4. Credit Suisse Life (Bermuda) Ltd v. Bidzina Ivanishvili [2025] UKPC 53 (Credit Suisse), at [126]. ↩︎
  5. Credit Suisse, at [179]. ↩︎
  6. Credit Suisse, at [162]. ↩︎
  7. Spice Girls Ltd v. Aprilia World Service BV [2002] EWCA Civ 15, at [67]. ↩︎
  8. Credit Suisse, at [176]. ↩︎
  9. See, for example, Conlon v. Simms [2006] EWCA Civ 1749. ↩︎
  10. See, for example, Nocton v. Ashburton [1914] A.C. 932. ↩︎
  11. Credit Suisse, at [178]. ↩︎
  12. Gordon v. Selico (1986) 18 HLR 219. ↩︎
  13. Credit Suisse, at [178]. ↩︎
  14. See, for example, MAN Nützfahrzeuge AG v. Freightliner Ltd [2005] EWHC 2347 (Comm). ↩︎