Privy Council Judgment in Credit Suisse Life Ltd v Ivanishvili [2025] UKPC 53 Changes the Law on Fraudulent Misrepresentation

On 24 November 2025, the Lord Hodge, Lord Briggs, Lord Leggatt, Lord Richards and Lady Simler of the Privy Council (“the Board”) handed down judgment in Credit Suisse Life Ltd v Ivanishvili [2025] UKPC 53. This case was an appeal from the Bermuda Court of Appeal brought by Credit Suisse Life Ltd and a related cross-appeal by Mr Bidzina Ivanishvili.

Significantly, the Board overturned prior authorities[1] and found that in establishing reliance, a claimant in a fraudulent misrepresentation case does not need to prove that they were specifically aware of the false representation. Instead, it is enough if the defendant’s representations caused the claimant to make a false assumption or hold a false belief, and for that assumption or belief to have caused the claimant to suffer loss.

The Key Facts

Background

The appellant, Credit Suisse Life Ltd (“CS Life”), is a Bermudian insurance company, and subsidiary of Credit Suisse AG (“the Bank”). The first respondent was Mr Ivanishvili, a businessman and the former Prime Minister of Georgia.

In 2011 and 2012, Mr Ivanishvili transferred US$750 million to CS Life as premiums under two life insurance policies. 

These transfers were made on the Bank’s advice. Specifically, they were made on the recommendation of Mr Patrice Lescaudron who was the relationship manager at Credit Suisse, as well as an employee of the Bank.

In 2015, Mr Ivanishvili discovered that the policy assets had been dealt with fraudulently by Mr Lescaudron. The fraudulent conduct included misappropriating assets, transferring assets from the policy accounts to those of unrelated clients, transferring assets into the policy accounts at an overvalue, and enriching himself by making investments of policy assets on which he received secret commissions.

Proceedings

Mr Ivanishvili (along with members of his family and two companies which are the named policyholders), brought proceedings against CS Life for breach of contract, breach of fiduciary duty and fraudulent misrepresentation in the courts of Bermuda. The fraudulent misrepresentation claim was made on the basis that Mr Lescaudron, by his conduct in recommending investment in the life insurance policies, had impliedly represented that the Bank was not managing Mr Ivanishvili’s accounts or assets fraudulently.

Mr Ivanishvili was successful at first instance before Chief Justice Hargun. However, on a cross-appeal, the Court of Appeal in Bermuda found that the claim failed because it had not been proven that Mr Ivanishvili was consciously aware of the implied representations.

CS Life then appealed to the Privy Council against the findings of the Bermudian courts on liability and quantum and Mr Ivanishvili cross-appealed against the dismissal of his misrepresentation claim and asked the Board to restore the decision of the Chief Justice that they are entitled to damages for fraudulent misrepresentation.

The Decision

There was no challenge to the findings of the Chief Justice that Mr Lescaudron had impliedly represented to Mr Ivanishvili that the Bank did not intend to manage the policy assets fraudulently.

However, one of the key questions for the Board was whether it was necessary for Mr Ivanishvili to have been aware of the specific representations.[2]

On this question, the Board found that contemporaneous awareness and understanding of the specific representation was not a legal requirement for fraudulent misrepresentation [157]-[158], [173], [179].

Instead, the Board found that there are only two aspects of the reliance/inducement element of a deceit claim: (i) that the representation must have deceived the claimant by causing them to hold a false belief; and (ii) that the claimant must, because of holding that false belief, have acted so as to suffer loss. Both of those aspects “require the representation to operate on the mind of C. But neither logically requires C to be consciously aware of the representation at the time when C acts on it. Nor is there any good reason to insist on such an additional requirement.” [161]

The logic underpinning this position was set out by Lord Leggatt as follows:

“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. This mischief is no less than in a case involving conscious awareness” [162].

The Board acknowledged that where representations are ambiguous, it will be necessary in practice to show that the claimant “understood them to convey a particular meaning” [170]. However, it found that cases have been mistaken “to treat what in practice needs to be shown to establish deceit in particular factual circumstances as if it were a necessary element of the cause of action” [173].

The relationship between representations and assumptions was also considered by the Board. In previous cases, a distinction has been drawn such that if the claimant acted on an assumption, it cannot be said that the defendant’s representation caused them to hold a false belief. However, the Board found that this creates a false dichotomy and that the concepts are not mutually exclusive. Instead, “what matters is whether, in a case where the claimant has acted on an assumption, the assumption was one which the claimant would naturally be expected to make in response to the defendant’s words or actions or whether it was one made independently by the claimant” [176].

Overall, the judgment marks a shift in focus for fraudulent misrepresentation claims from the claimant’s actual knowledge of the pleaded specific representation to whether the defendant’s conduct encouraged a false assumption (subjectively considered) or false belief on the part of the claimant (such as false sense of security or comfort), which was causative of the claimant’s loss.

Comment and Conclusion

This landmark decision represents an important clarification of the law of misrepresentation and will be of particular interest to those practitioners handling claims involving fraud-related arbitration and litigation.

Whilst the decision from the Privy Council will not be directly binding on the English courts, its reasoning will be highly persuasive and it is unlikely in practice that the decision will not be followed.

The decision in essence lowers the bar for claimants pleading and proving fraudulent misrepresentation cases, in circumstances where the defendant’s conduct induces the claimant to assume a false state of affairs (which the claimant would be naturally expected to make in response to the defendant’s conduct).

Therefore, although there is no longer the need for claimants to prove their conscious awareness of an implied representation and their specific reliance upon it, they still must prove the defendant’s conduct, their ‘false’ assumption and that as a consequence of these factors, they were induced to enter into the subject contract and sustained loss as a result.

Therefore, for practitioners, when framing a fraudulent misrepresentation claim and considering the supporting evidence, emphasis now should be given to not only the existence and falsity of the subjective representation (having regard to the defendant’s conduct in how the representation was made), but also its causal effect in how that representation was either understood, or relied upon by the claimant (and what the claimant assumed in the circumstances) and whether the false representation was causative of the claimant’s loss.