Banco de Portugal v Waterlow & Sons  AC 452
The Banco de Portugal was the central bank of Portugal, responsible for the issue of banknotes. They decided to release a new banknote worth 500 escudo featuring explorer Vasco da Gama, so they made a contract with Waterlow & Sons, printers, to print 600,000 of the banknotes.
A syndicate of criminals sent a representative to Waterlow & Sons. The criminal representative convinced Waterlow he was also a credentialed representative of the Banco de Portugal, and he placed an order for a further 580,000 of the notes.
They argued that the expenditure made by the bank in honouring the counterfeit notes was the bank’s own decision. The court disagreed. The bank’s decision to honour all of the notes was a reasonable mitigating measure. If the bank had attempted to honour none of the notes, this would have utterly undermined confidence in the economy, with disastrous results. As a result, the measures taken by the bank were reasonable mitigating measures, and Waterlow & Sons had to foot the entire bill – over £600,000.