The publication of the opinion of the Privy Council on an appeal brought by trustees of two Guernsey settlements in Spread Trustee Company Limited v. Hutcheson and others [2012] 1 All. ER 251-378, in the All England Law Reports, allows an opportunity for a greater insight into the liability of trustees of settlements and a better opportunity to compare their liability to the liability of a foundation council.

Views on this would be welcome. Any offers?

The case in the Privy Council very much concerned the validity in those particular settlements of an exoneration clause but the background to this was the source of the liabilities of the trustees. The duty of trustees was considered as part of their fiduciary duties and particularly their specific duties as trustees.
Lord Clarke put it this way:

‘First, where, as here, what is alleged against the trustee is a breach of the duty of care owed to the beneficiaries by the trustee, the fiduciary duties of the trustee are of no relevance. Nothing in the fiduciary duties owed by the trustee alters the standard of the duty of care owed by it. In the opinion of the Board, the suggestion that the standard of the duty of care owed by the trustee is somehow elevated by reference to concomitant fiduciary duties elides the fundamental distinction between the fiduciary duties owed by the trustee on the one hand and the duty to exercise care and skill owed by the trustee on the other. Secondly, the exemption from liability in respect of a trustee’s gross negligence is not inimical to the fiduciary duties owed by a trustee for the simple reason that the absence of honesty and good faith inherent in the failure to perform fiduciary duties would take such conduct outside the scope of such an exemption.’

Looking forward to learned and practical comments.