On 24 November 2025, the Privy Council gave an important judgment in Credit Suisse Life (Bermuda) Ltd v Bidzina Ivanishvili [2025] UKPC 53. The judgment clarifies the requirements for a fraudulent misrepresentation claim under the tort of deceit and considers whether it is a legal requirement that the claimant proves awareness of the representation on which the claim is based. In a unanimous judgment given by Lord Leggatt, the Board took a robust approach and rejected the notion that the claimant must be consciously aware of a representation.

Key background

The case concerned the fraud perpetrated on the first respondent, Bidzina Ivanishvili, a businessman and former Prime Minister of Georgia. Between 2011 and 2012, Mr Ivanishvili transferred over US$750 million to the appellant, Credit Suisse Life (Bermuda) Ltd (“CS Life”), a subsidiary of Credit Suisse AG (the “Bank”). This money was held on trust as premiums under two life insurance policies for the benefit of Mr Ivanishvili and his family. The Bank had responsibility for managing the policy assets, which were to be invested on a discretionary basis. Mr Ivanishvili bought these policies, which were “in essence investment funds” ([14]), on the basis of advice from his relationship manager at the Bank, Mr Patrice Lescaudron.

In 2015, Mr Ivanishvili discovered that Mr Lescaudron had dealt with his policy assets fraudulently. Among other examples of misuse, he misappropriated the assets, transferred them to other client accounts, and received secret commissions on investments. After his criminal prosecution and conviction in Switzerland, Mr Lescaudron committed suicide.

Mr Ivanishvili (along with his family members and company policyholders) brought proceedings against CS Life for breach of contract and breach of fiduciary duty in 2017 and for fraudulent misrepresentation in 2020.

Prior decisions

The Chief Justice of Bermuda held that CS Life was in breach of contract and fiduciary duty to Mr Ivanishvili, who had also been induced to enter into the policies by fraudulent misrepresentations. The judgment found that Mr Lescaudron had impliedly represented that there would be no fraudulent management of the policy assets. He did so falsely and knowingly, inducing Mr Ivanishvili to enter into the policies (see [115] of Ivanishvili).

The Court of Appeal of Bermuda dismissed CS Life’s appeal in relation to the claims for breach of contract and fiduciary duty. However, it allowed the appeal in relation to the fraudulent misrepresentation claim on the basis that Mr Ivanishvili had not proved that he had been consciously aware of the implied representations ([116]).

As a result of that decision, CS Life appealed to the Privy Council, arguing that the Court of Appeal had been wrong to uphold the award of damages for breach of contract and fiduciary duty. Mr Ivanishvili also cross-appealed against the dismissal of his misrepresentation claim. The awareness requirement for the misrepresentation claim became the main bone of contention on appeal, which forms the focus of this article.

Privy Council decision

The appeal

The Board dismissed all but one of the appellant’s grounds of appeal to the contractual and fiduciary claims, holding that only the start date for the assessment of damages was incorrect. A re-calculation of damages was therefore necessary.

The cross-appeal

As for the cross-appeal to the misrepresentation claim, the Privy Council analysed first the actionability of the tort claim under Bermudian law, which is the same as under English law. It was common ground before the Privy Council that the pleaded implied representations had been made, that they had been made fraudulently, that they were intended to induce the claimant, and that the claimant had in fact been induced ([115]). The narrow question for the Board was whether reliance in deceit featured a separate, additional requirement for conscious awareness of the representation.

The Board found that awareness or understanding of a representation is not a requirement of this cause of action ([157]).

In doing so, the Board overturned a number of authorities that appeared to include awareness or understanding as an essential element of a misrepresentation claim, beginning with Raiffeisen Zentralbank Österreich AG v Royal Bank of Scotland plc [2010] EWHC 1392 (Comm). In particular, Cockerill J (as she was then), having considered the issue of awareness thoroughly, held in Leeds City Council v Barclays Bank plc [2021] EWHC 363 (Comm) that “there is some requirement of awareness” ([143] of Ivanishvili). She then reasoned in Loreley Financing (Jersey) No. 30 Limited v Credit Suisse Securities (Europe) Limited [2023] EWHC 2759 (Comm) that only “simple” representations which are “at the heart of the transaction” mean that “the question of awareness is one to which the answer is obvious” and can be established without “distinct evidence of understanding or awareness being identified” ([148] of Ivanishvili). Otherwise, for more complex representations where awareness is far from obvious, a lack of evidence of awareness would likely be fatal to a claim.

The Board firmly concluded that this trend of cases had taken a wrong turn ([157]).

First, in many cases claimants operate on assumptions rather than conscious understanding of an implied representation. For instance, waiters serving customers in a restaurant or taxi drivers picking up passengers do not pause to reflect that their clients are making a representation that they will pay. Rather, there is “an assumption that arises naturally through established social norms and expectations” ([153]).

Secondly, there are cases where there can be no conscious awareness if, albeit rarely, a claimant is ignorant of “the conduct which gives rise to the representation” ([154]), such as covering up dry rot in a house for sale (as was the case in Gordon v Selico Ltd (1986) 18 HLR 2019).

Thirdly, Cockerill J’s distinction between simple and complex representations (see above) does not mean that awareness or understanding of the former is “obvious”, but rather that the making of the representation is obvious ([156]). There may be no conscious awareness even of a plainly made representation.

The Board gave several explanations for why previous cases had entertained awareness or understanding as a requirement:

• There was a misunderstanding that awareness was required to show reliance on a representation. The Board recognised that forming and acting on beliefs without conscious awareness is “an everyday feature of human experience” ([162]).
• Awareness had been mistakenly treated as a necessary element of the cause of action because of cases about ambiguous representations, where a claimant’s understanding had been required as a matter of evidence. The Board did emphasise, however, that “in practice”, wherever the meaning of the defendant’s words or conduct is “non-obvious” and potentially ambiguous, “it will be necessary to show that the claimant understood them to convey a particular meaning” ([170]-[173]).
• It had been thought necessary to preserve a distinction between reliance on a representation and acting on an assumption. However, there is no real difference between a defendant who “acts with the intention of causing the claimant to make and act on an erroneous assumption” and one who “operat[es] on the conscious mind of the claimant” ([175]). On the other hand, “if the claimant has acted as a result of an erroneous belief not caused by the defendant, the defendant will not be liable” ([176]).
• There was a misconception that the awareness requirement drew the line between misrepresentation and non-disclosure. Yet a claimant’s awareness of a representation is irrelevant to the question of whether a defendant has actively caused a false belief or merely failed to inform or correct it ([177]-[178]).

Mr Ivanishvili did not, therefore, have to prove that he was consciously aware of Mr Lescaudron’s implied representations. However, on the facts here, the misrepresentation claim still failed because it was commenced after the relevant limitation period in Georgia.

Comment

This Privy Council decision marks a significant turning point in the law on fraudulent misrepresentation. Whilst persuasive only, it is highly likely that it will be followed in English courts. Parties considering potential misrepresentation claims no longer need to show any contemporaneous awareness or understanding of a representation on which they later rely. All that the reliance element requires now is that the representation caused the claimant to hold a false belief, because of which they suffered loss. This causative aspect is key: be it a conscious understanding or unconscious assumption by the claimant, a defendant will not be liable if they have not caused it.

The decision potentially lowers the bar for claimants in cases where relatively simple or obvious implied misrepresentation claims are pursued and it could, therefore, lead to an increase in claims of this nature. However, awareness or understanding may still be necessary to prove in practice. If a representation is particularly ambiguous or complex, the claimant will need to plead and prove that it understood the representation in the way that the defendant intended it to be understood at the time, and not only with the benefit of hindsight.

Written by Laura Wilson and Krupa Vekaria. For more information about the contents of this article, please contact Nick Jones.