January 2020 | By Dr. David Hayton

Safeguarding trustees’ interests

Abstract

The recent Sofer case shows how trustees can safeguard their interests via exoneration clauses, deeds of indemnity and even estoppel by convention. It also makes clear how beneficiaries faced with an exoneration clause, which they seek to oust due to the dishonesty of the trustee, bear the onus of fully particularising the dishonesty or their claims may be struck out.

Taking account of the extensive obligations of trustees and the cost of insurance cover, while trying to keep charges to a reasonable level, trustees wisely seek to avoid possible liabilities in difficult circumstances by relying upon exoneration clauses and deeds of indemnity if they can. It also helps if a trustee can cut out claims against it as soon as practicable via striking out a beneficiary’s claim or claiming a summary judgment in favour of the defendant trustee.

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Safeguarding trustees’ interests

By Dr. David Hayton, published by Oxford University Press in Trusts & Trustees,Volume 25, Issue 10, December 2019, Pages 1016–1021.