Personal Claims

Question 1

What are the two types of claims that can be bought by beneficiaries

Answer 1

• Personal claims
• Proprietary claims

Question 2

What is a personal claim against a trustee?

Answer 2

the beneficiaries claim against a trustee personally after their wrongdoing causes the trust to suffer a loss.

trustee will be required to satisfy the claim from their own property or funds

Question 3

What is the time limitation on personal claims

Answer 3

6 years after the date of breach

Question 4

Which trustees can be the subject matter of a personal claim?

Answer 4

Those that breached the trust duties

Question 5

What is the liability of joint trustees

Answer 5

Liability is joint and several 2

Question 6

What is the test for establishing causation of breach

Answer 6

the but for test - the loss would not have occurred but for the breach of trust

Question 7

How much will the trustees usually recover if they successfully claim

Answer 7

they recover compensation equal to the loss to the trust, plus interest from the date of breach

Question 8

What is the rate of interest

Answer 8

allowed on the court’s short term investment account

Question 9

What are the different defences to a personal claim

Answer 9

a) an exemption clause in the trust deed
b) knowledge and consent of the beneficiaries
c) s61 of the TA 1925
d) limitation and laches

Question 10

When will an exemption clause be void ?

Answer 10

insofar as it tries to exclude liability for fraudulent breaches

Question 11

How will ambiguity in an exemption clause be interpreted in the context of professional trustees?

Answer 11

it will be interpreted strictly against that professional

Question 12

What must a professional trustee who caused a settlor to include an exemption clause do?

Answer 12

• Before creation of the trust:
  -take such steps as are reasonable to ensure that the settlor is aware of the meaning and effect of the clause