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Trustee Negligence

For this purpose a ‘Trust’ is either:

  1. 1. Express - a document (a Deed or a Will), under which one party (‘the donor’ or ‘testator’) transfers money or property to another party or parties (the ‘trustee(s)’) on the understanding that they will deal with that property in the way that the donor or testator directs, usually for the benefit of another party (‘the beneficiary’); or
  2. 2. Implied- where a person (‘a trustee’) occupies a particular position which   empowers them to deal with property that does not belong to them, for the benefit of another party (‘the beneficiary’).

A person who acts as a trustee has a duty of the utmost good faith to the beneficiaries (called a Fiduciary Duty). A Breach of Trust is either an act or a failure to act that is not authorised either by any document that creates a trust, or by law; for example, where a trustee transfers property to a person who is not the beneficiary who should have received it. A Breach of Trust may also occur where the trustee makes a profit for himself out of the trust property, or mismanages it in a way that causes it to lose its value.

However this occurs, the intended beneficiary loses the benefit that was intended for him, or is deprived of benefit that is rightfully his.

A Breach of Trust can happen in any number of situations, but where a professional acts in Breach of Trust, the remedies available to the beneficiary are wider than the usual remedy of damages that would apply where the Breach is treated as either negligence or a Breach of Contract, and may offer the beneficiary a more advantageous remedy.

For example, it may be possible for a contract to sell the trust property, entered into in Breach of Trust to be rescinded and the property returned or replaced, or for the trustee to  account for profit made through a Breach of Trust, in addition to damages and enhanced interest (at the court’s discretion).

Our Dispute Resolution Team are specialists in this area and also make use of the combined expertise of our Property Team and our Wills, Trusts & Probate team to assess your case and advise you on the options available to remedy a Breach of Trust.