DOCSLIB.ORG

The Law Commission (LAW COM No 350) FIDUCIARY DUTIES OF

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text

Load more

Fiduciary Duties of Investment Intermediaries Law Com No 350 The Law Commission (LAW COM No 350) FIDUCIARY DUTIES OF INVESTMENT INTERMEDIARIES Presented to Parliament pursuant to section 3(2) of the Law Commissions Act 1965 Ordered by the House of Commons to be printed on 30 June 2014 HC 368 © Crown copyright 2014 You may re-use this information (excluding logos) free of charge in any format or medium, under the terms of the Open Government Licence v.2. To view this licence visit www.nationalarchives.gov.uk/doc/open-government-licence/version/2/ or email [email protected] Where third party material has been identified, permission from the respective copyright holder must be sought. This publication is available at www.gov.uk/government/publications Print ISBN 9781474107631 Web ISBN 9781474107648 Printed in the UK by the Williams Lea Group on behalf of the Controller of Her Majesty’s Stationery Office ID 19061402 06/14 41342 19585 Printed on paper containing 75% recycled fibre content minimum ii THE LAW COMMISSION The Law Commission was set up by the Law Commissions Act 1965 for the purpose of promoting the reform of the law. The Law Commissioners are: The Right Honourable Lord Justice Lloyd Jones, Chairman Professor Elizabeth Cooke David Hertzell Professor David Ormerod QC Nicholas Paines QC The Chief Executive of the Law Commission is Elaine Lorimer. The Law Commission is located at 1st Floor, Tower, 52 Queen Anne’s Gate, London SW1H 9AG. The terms of this report were agreed on 4 June 2014. The text of this report is available on the Law Commission’s website at http://lawcommission.justice.gov.uk/areas/fiduciary_duties.htm. iii THE LAW COMMISSION FIDUCIARY DUTIES OF INVESTMENT INTERMEDIARIES CONTENTS Paragraph Page GLOSSARY ix CHAPTER 1: INTRODUCTION 1 The Kay Review 1.3 1 Terms of reference 1.14 4 The meanings of fiduciary duty 1.16 5 Who invests in UK equities? 1.21 6 A pensions focus 1.24 7 Other trusts 1.28 7 Our review of social investment by charities 1.29 8 The consultation responses 1.34 8 This report 1.36 9 Thanks and acknowledgments 1.44 11 CHAPTER 2: THE PENSIONS LANDSCAPE 12 Types of pension scheme 2.4 12 Automatic enrolment 2.26 17 Pensions regulation: a dual system 2.32 18 Types of pension scheme: a summary 2.45 21 The changing nature of occupational pensions 2.46 23 Pension challenges 2.61 27 iv Paragraph Page A comparison with Australia 2.73 30 Conclusion 2.75 30 CHAPTER 3: FIDUCIARY DUTIES WITHIN THE LEGAL FRAMEWORK 31 Multiple sources of law 3.5 31 The meanings of fiduciary duty 3.11 33 Who is subject to fiduciary duties? 3.14 34 The content of fiduciary duties 3.25 38 Duties connected to the exercise of a power 3.44 46 Duties of care 3.68 53 Conclusion 3.89 60 CHAPTER 4: INVESTMENT DUTIES OF PENSION TRUSTEES 61 The pensions legislation 4.6 62 The principles of trust law 4.31 68 Statutory schemes 4.59 78 Conclusion 4.82 83 CHAPTER 5: FACTORS IN PENSION TRUST INVESTMENT: CONSULTATION PAPER AND RESPONSES 84 What we said in the Consultation Paper 5.5 85 Consultees’ views 5.20 88 What is the purpose of the trust? 5.24 89 Maximising returns at the expense of long-term risks? 5.47 93 The need for clarity over terms 5.57 96 Should trustees always take ESG factors into account? 5.63 97 Stewardship: beyond the reach of small funds? 5.77 101 v Paragraph Page Conclusion 5.99 107 CHAPTER 6: FACTORS IN PENSION TRUST INVESTMENT: THE LAW COMMISSION’S VIEW 108 The duties of pension trustees: an overview 6.4 108 The statement of investment principles (SIP) 6.16 111 Delegation 6.19 111 Financial and non-financial factors 6.21 111 Financial factors 6.24 112 Non-financial factors 6.33 113 The tests for applying non-financial factors 6.57 118 Exceptions: when can significant financial detriment be justified? 6.84 124 Conclusion 6.99 127 CHAPTER 7: FACTORS IN PENSION TRUST INVESTMENT: A NEED FOR REFORM? 128 An appropriate understanding of beneficiaries’ interests? 7.5 128 Is the law sufficiently certain? 7.20 131 Codification 7.37 135 The need for guidance 7.44 136 Reviewing the Occupational Pension Schemes (Investment) Regulations 2005 7.60 140 CHAPTER 8: CONTRACT-BASED PENSIONS: DUTIES TO ACT IN THE BEST INTERESTS OF MEMBERS 147 A contract with each individual member 8.4 147 Regulation 8.9 148 The role of the employer 8.37 156 vi Paragraph Page Independent governance committees 8.42 158 Do fiduciary duties apply to contract-based pensions? 8.46 159 Consultees’ views 8.55 161 Conclusion 8.64 162 CHAPTER 9: DEFINED CONTRIBUTION WORKPLACE PENSIONS: CHALLENGES OF GOVERNANCE 164 The governance gap 9.7 165 The Government’s response 9.22 168 Comment on these changes 9.47 174 Challenges ahead 9.54 175 Chosen funds 9.73 179 Conclusion 9.82 181 CHAPTER 10: DUTIES IN THE INVESTMENT CHAIN: THE CURRENT LAW 183 The Kay Review’s recommendation 10.9 185 Who might be considered a fiduciary? 10.12 186 What is the content of the fiduciary duties? 10.41 194 To whom are the duties owed? 10.69 202 Conclusion 10.76 204 CHAPTER 11: DUTIES IN THE INVESTMENT CHAIN: A NEED FOR REFORM? 206 Should the law of fiduciary duties be reformed? 11.4 206 An alternative right to sue: extending section 138D 11.10 207 Strengthening FCA rules 11.36 213 Investment consultants 11.40 213 Stock lending 11.63 218 vii Paragraph Page The law of intermediated securities 11.105 227 Conclusion 11.145 237 CHAPTER 12: LIST OF RECOMMENDATIONS 239 APPENDIX A: TERMS OF REFERENCE 241 APPENDIX B: LEGISLATIVE PROVISIONS 243 APPENDIX C: LIST OF CONSULTEES 252 viii GLOSSARY Active investment An approach to investment which involves the continuous buying and selling of investments. An active investment manager will typically seek to outperform an investment benchmark. Active member Members who are currently accruing benefits under the scheme. Actuary A professional who specialises in statistics and risk who gives advice on a pension scheme’s assets and liabilities. They will predict movements in the scheme, such as deaths, retirements and withdrawals, and estimate the costs of providing the benefits due and accruing in the future. Annuity A fixed sum of money paid to individuals each year upon retirement. This may be for an agreed period or for the rest of the individual’s life. The amount of money paid will depend on the individual’s total accumulated pension savings. Asset manager See “investment manager”. Automatic enrolment Also known as “auto-enrolment”. A new legislative requirement introduced by the Pensions Act 2008 which requires all employers (beginning with the largest) to automatically enrol their qualifying employees into a qualifying pension scheme. Best of sector Also known as “best of class”. Companies that perform best in their industry sector against specified indicators. Broker An individual or organisation that acts as an intermediary between a buyer and seller, usually in return for the payment of a commission. Bundled scheme A pension scheme where the pension provider also administers the scheme. COBS Conduct of Business Sourcebook. The section of the Financial Conduct Authority’s Handbook that deals with business standards. ix Contract-based scheme These may be work-based or individual. In work-based contract-based schemes, the employer appoints a pension provider, usually an insurance company, to administer their pension scheme. The employees enter into a contract directly with the pension provider, although the employer may make arrangements to collect and pay contributions. In individual contract-based scheme, an individual enters into a contract directly with a pension provider. Contributions The money paid by members and employers into the pension scheme. CP 215 Fiduciary Duties of Investment Intermediaries (2013) Law Commission Consultation Paper No 215. Custodian An institution that is responsible for the safekeeping and administration of assets belonging to another. Custodians will often handle administrative arrangements such as collecting coupons and dividends. Default fund The investment fund into which employees’ contributions are paid if they fail to make an active choice of fund. It is usually designed for this purpose. Deferred member A member that no longer contributes to or accrues benefits under a scheme but has not yet begun to receive retirement benefits from that scheme. Defined benefit (DB) schemes Also known as “final salary” schemes. A type of pension where the amount an employee receives on retirement is pre-determined, and is often calculated on the basis of the employee’s final salary and length of service. The amount received on retirement does not depend on the performance of the pension scheme’s investments. Defined contribution (DC) schemes Also known as “money purchase” schemes. A type of pension where the amount received by a member on retirement will be calculated by reference to the contributions the employee makes to the scheme and the investment return on those contributions. Department for Work and Pensions (DWP) The government department responsible for pensions policy. x Direct payment arrangements Arrangements between the member and the employer under which contributions fall to be paid by the employer towards the scheme. Such arrangements will exist where the employer arranges to make employer contributions to a personal pension scheme and/or where the employer arranges to deduct the member’s contributions from pay and to pay them across to the pension scheme for the member. Environmental, social and governance (ESG) factors Sometimes referred to as “responsible investing”.
Recommended publications
  • Monitoring the Duty to Monitor

    Monitoring the Duty to Monitor

    Corporate Governance WWW. NYLJ.COM MONDAY, NOVEMBER 28, 2011 Monitoring the Duty to Monitor statements. As a result, the stock prices of Chinese by an actual intent to do harm” or an “intentional BY LOUIS J. BEVILACQUA listed companies have collapsed. Do directors dereliction of duty, [and] a conscious disregard have a duty to monitor and react to trends that for one’s responsibilities.”9 Examples of conduct HE SIGNIFICANT LOSSES suffered by inves- raise obvious concerns that are industry “red amounting to bad faith include “where the fidu- tors during the recent financial crisis have flags,” but not specific to the individual company? ciary intentionally acts with a purpose other than again left many shareholders clamoring to T And if so, what is the appropriate penalty for the that of advancing the best interests of the corpo- find someone responsible. Where were the direc- board’s failure to act? “Sine poena nulla lex.” (“No ration, where the fiduciary acts with the intent tors who were supposed to be watching over the law without punishment.”).3 to violate applicable positive law, or where the company? What did they know? What should they fiduciary intentionally fails to act in the face of have known? Fiduciary Duties Generally a known duty to act, demonstrating a conscious Obviously, directors should not be liable for The duty to monitor arose out of the general disregard for his duties.”10 losses resulting from changes in general economic fiduciary duties of directors. Under Delaware law, Absent a conflict of interest, claims of breaches conditions, but what about the boards of mort- directors have fiduciary duties to the corporation of duty of care by a board are subject to the judicial gage companies and financial institutions that and its stockholders that include the duty of care review standard known as the “business judgment had a business model tied to market risk.
  • Addressing Duty of Loyalty Parameters in Partnership Agreements: the More Is More Approach

    Addressing Duty of Loyalty Parameters in Partnership Agreements: the More Is More Approach

    Athens Journal of Law XY Addressing Duty of Loyalty Parameters in Partnership Agreements: The More is More Approach * By Thomas P. Corbin Jr. In drafting a partnership agreement, a clause addressing duty of loyalty issues is a necessity for modern partnerships operating under limited or general partnership laws. In fact, the entire point of forming a limited partnership is the recognition of the limited involvement of one of the partners or perhaps more appropriate, the extra-curricular enterprises of each of the partners. In modern operations, it is becoming more common for individuals to be involved in multiple business entities and as such, conflict of interests and breaches of the traditional and basic rules on duty of loyalty such as those owed by one partner to another can be nuanced and situational. This may include but not be limited to affiliated or self-interested transactions. State statutes and case law reaffirm the rule that the duty of loyalty from one partner to another cannot be negotiated completely away however, the point of this construct is to elaborate on best practices of attorneys in the drafting of general and limited partnership agreements. In those agreements a complete review of partners extra-partnership endeavours need to be reviewed and then clarified for the protection of all partners. Liabilities remain enforced but the parameters of what those liabilities are would lead to better constructed partnership agreements for the operation of the partnership and the welfare of the partners. This review and documentation by counsel drafting general and limited partnership agreements are now of paramount significance.
  • Fiduciary Duties

    Fiduciary Duties

    Legal Affairs & Association and MLS Governance JANUARY 2018 FIDUCIARY DUTIES IN A NUTSHELL 1. Pursuant to state law, individuals serving on an association’s board of directors as directors or officers (“Association Leaders”) owe fiduciary duties to the association. 2. Fiduciary duties are owed to the association and not to the association’s members. 3. In general, fiduciary duties require Association Leaders to act in good faith, in the best interest of the association at all times, and to never make decisions based on furthering a personal or outside business interest. 4. Specifically, fiduciary duties may include the duties of care, confidentiality, loyalty, obedience, and accounting. 5. Association Leaders must avoid, disclose, and resolve any conflicts of interest prior to voting or otherwise participating in any deliberations concerning an association matter. NUTS AND BOLTS Fiduciary Duty is defined by Black’s Law Dictionary as “a duty of utmost good faith, trust, confidence, and candor owed by a fiduciary (such as a lawyer or corporate officer) to the beneficiary (such as a lawyer’s client or a shareholder); a duty to act with the highest degree of honesty and loyalty toward another person and in the best interests of the other person.” An Association Leader’s specific fiduciary duties may include: 1. Duty of Care - requires Association Leaders to exhibit honesty, act in good faith, and exercise ordinary and reasonable care in the discharge of their duties. Directors must attend, thoroughly prepare for, and actively engage in deliberations during meetings, and when necessary, seek advice from third-party experts, such as attorneys or accountants.
  • The Duty of Loyalty in the Employment Relationship

    The Duty of Loyalty in the Employment Relationship

    Journal of Legal, Ethical and Regulatory Issues Volume 21, Issue 3, 2018 THE DUTY OF LOYALTY IN THE EMPLOYMENT RELATIONSHIP: LEGAL ANALYSIS AND RECOMMENDATIONS FOR EMPLOYERS AND WORKERS Frank J Cavico, Nova Southeastern University Bahaudin G Mujtaba, Nova Southeastern University Stephen Muffler, Nova Southeastern University ABSTRACT Capitalism, free markets and competition are all concepts and practices that are deemed to be good for the growth, development and sustainability of the economy while also benefiting consumers through more variety and lower prices. Of course, this assumption only holds true if markets and competition are open, honest and fair to all parties involved, including employers as every organization is entitled to faithful and fair service from its workers. The common law duty of loyalty in the employment relationship ensures fair competition and faithful service. Of course, a duty of loyalty is often violated when an employee begins to compete against his or her current employer. As such, the employee must not commit any illegal, disloyal, unethical or unfair acts toward his/her employer during the employment relationship. Accordingly, in this article, we provide a review of how the courts “draw the line” between permissible competition and disloyal actions. We discuss the key legal principles of the common law duty of loyalty, their implications for employees and employers and we provide practical recommendations for all parties in the employment relationship. Keywords: Duty of Loyalty, Faithless Servant, Fiduciary Relationships, Replevin, Common Law. INTRODUCTION This article examines the duty of loyalty in the employer-employee relationship. The focus is on the duty of the employee to act in a loyal manner while being employed by the employer.
  • Modification of Fiduciary Duties in Limited Liability Companies

    Modification of Fiduciary Duties in Limited Liability Companies

    Modification of Fiduciary Duties in Limited Liability Companies James D. Johnson Jackson Kelly PLLC 221 N.W. Fifth Street P.O. Box 1507 Evansville, Indiana 47706-1507 812-422-9444 [email protected] James D. Johnson is a Member of Jackson Kelly PLLC resident in the Evansville, Indiana, office. He is Assistant Leader of the Commercial Law Practice Group and a member of the Construction Industry Group. For nearly three decades, Mr. Johnson has advised clients in a broad array of business matters, including complex commercial law, civil litigation and appellate law. He has been named to The Best Lawyers in America for Appellate Practice since 2007. Spencer W. Tanner of Jackson Kelly PLLC contributed to this manuscript. Modification of Fiduciary Duties in Limited Liability Companies Table of Contents I. Introduction ...................................................................................................................................................5 II. The Traditional Fiduciary Duties ..................................................................................................................5 III. Creation of Fiduciary Duties in Closely Held Business Organizations ......................................................6 A. General Partnerships ..............................................................................................................................6 B. Domestic Corporations ..........................................................................................................................6
  • Level 6 - Unit 5 – Equity & Trusts Suggested Answers – January 2011

    Level 6 - Unit 5 – Equity & Trusts Suggested Answers – January 2011

    LEVEL 6 - UNIT 5 – EQUITY & TRUSTS SUGGESTED ANSWERS – JANUARY 2011 Note to Candidates and Tutors: The purpose of the suggested answers is to provide students and tutors with guidance as to the key points students should have included in their answers to the January 2011 examinations. The suggested answers set out a response that a good (merit/distinction) candidate would have provided. The suggested answers do not for all questions set out all the points which students may have included in their responses to the questions. Students will have received credit, where applicable, for other points not addressed by the suggested answers. Students and tutors should review the suggested answers in conjunction with the question papers and the Chief Examiners’ reports which provide feedback on student performance in the examination. SECTION A 1(a) A decree of specific performance is a court order instructing a party to a contract to perform their obligations under that contract. Failure to comply is contempt of court. It is a precondition of a decree of specific performance that the remedy at law is inadequate. That remedy is generally damages. This is consistent with the role of equity within our legal system, as it developed to provide remedies for those who could not receive the assistance they required through the common law courts. Whether damages are an adequate remedy will depend on the subject matter of the contract. If a contract is for the sale and purchase of an item that is unique, no amount of damages will be able to make up for the fact that the purchaser will no longer receive the item they contracted for.
  • 1 the Attorney's Fiduciary Duties to Trust

    1 the Attorney's Fiduciary Duties to Trust

    1 THE ATTORNEY’S FIDUCIARY DUTIES TO TRUST BENEFICIARIES By Charles T. Newland CHARLES T. NEWLAND & ASSOCIATES Olivet Nazarene Building 3601 Algonquin Road, Suite 990 Rolling Meadows, IL 60008 Tel. (847)797-9300 Fax (847)797-9301 [email protected] IT IS THE RELATIONSHIP THAT CREATES FIDUCIARY DUTIES. What it is a fiduciary relationship? “… a situation where trust and confidence are reposed by one person in another who, as a result, gains a dominance, influence and superiority over the other as to the transaction in question." Brandt v. Uptown Nat. Bank of Moline, 212 Ill.App.3d 621, 571 N.E.2d 531 (3rd Dist 1991). Attorney-Client Relationship The existence of an attorney-client relationship creates a fiduciary relationship between those parties as a matter of law. In re Imming, 131 Ill.2d 239, 545 N.E.2d 715, 721 (1989). “Among the fiduciary duties imposed upon an attorney are those of fidelity, honesty and good faith in the discharge of contractual obligations to, and professional dealings with, a client. "When, in the course of his professional dealings with a client, an attorney places personal interests above the interests of the client, the attorney is in breach of his fiduciary duty by reason of the conduct." Doe v. Roe, 289 Ill.App.3d 116, 681 N.E.2d 640 (1997). Trustee-Beneficiary relationship A fiduciary relationship exists between a trustee and beneficiary as a matter of law. Janowiak v. Tiesi, 402 Ill.App.3d 997, 1006, 932 N.E.2d 569, 579 (3rd Dist. 2010). "Trustees are but one example of a myriad of fiduciaries including guardians, executors, administrators, and agents.
  • Article Jurisdictions

    Article Jurisdictions

    10 02 Trusts & Trustees, Vol. 22, No. 9, November 2016, pp. 1002–1014 Thoughts on future trust law developments Justice David Hayton* Abstract Milton Grundy) providing for ‘exempted trusts’, registered with the Registrar of Trusts, where all the Many foreign trust laws provide ‘firewall’ protec- rights and remedies that the beneficiaries would tions for trust property and strengthen the set- otherwise have were vested in the Registrar, the ben- tlor’s position at the beneficiaries’ expense. They eficiaries having no rights or remedies against any- also provide more flexible liberal parameters for a 1 trust than permitted under traditional trust laws. one. This enabled English taxes to be avoided till Will there not be an increasing choice of foreign blocked by the Finance Act 1969. laws by settlors and even increasing changes from However, civil law notaries and civil law commer- one governing trust law to another (under an ex- cial lawyers were becoming increasingly aware of the press power in that behalf) so as to exploit the use of English trusts to provide for a testator’s prop- advantages of such laws? The future for arbitration erty situate in civilian jurisdictions after his death and of internal trust disputes and enforcement of to provide ring-fenced financial arrangements in such awards is, however, very cloudy, due to Article jurisdictions. Pressure from these notaries and lawyers 6(1) of the Human Rights Convention and led countries to have The Hague Conference on Article V(2)(a) of the New York Arbitration Private International Law take steps for the prepar- Convention.
  • THE DELAWARE Journal of CORPORATE LAW

    THE DELAWARE Journal of CORPORATE LAW

    THE DELAWARE jOURNAL OF CORPORATE LAW MEMORIAL TO PROFESSOR DONALD E. PEASE ARTICLES THE DUTY OF FINEST LOYALTY AND REASONABLE DECISIONS: THE BUSINESS JUDGMENT RULE IN UNINCORPORATED BUSINESS ORGANIZATIONS? Elizabeth S. Miller and Thomas E. Rutledge MAPPING DELAWARE'S ELUSIVE DIVIDE: CLARIFICATION AND FURTHER MOVEMENT TOWARD A MERITS-BASED ANALYSIS FOR DISTINGUISHING DERIVATIVE AND DIRECT CLAIMS IN AGOSTINO V. HICKS AND TOOLEY V. DONAWSON, LUFKIN & lENREJTE, INC. Richard Montgomery Donaldson THE EcONOMICS OF DELAWARE FAIR VALUE Brett A. Margolin and Samuel J. Kursh GOING-PRIVATE TRANSACTIONS: A PRACTITIONER'S GUIDE Michael J. McGuinness and Timo Rehbock Volume30 2005 Number2 THEDUTYOFFINESTLOYALTY ANDREASONABLEDECISIONS: THE BUSINESS JUDGMENT RULE IN UNINCORPORATED BUSINESS ORGANIZATIONS? BY ELIZABETH S. MILLER• AND THOMAS E. RUTLEDGE.. ABSTRACT The business judgment rule, a cornerstone of the jurisprudence of the duty of care in the corporate context, holds a less defined role in the contractually driven realm of unincorporated business organizations such as the partnership, limited partnership, and limited liability company. This uncertainty has in recent years been exacerbated by rapid developments in statutory schemes. This article examines ( 1) the business judgment rule as applied in the corporate context, (2) the recent developments in the laws of unincorporated business organizations, and (3) the interplay of the business judgment rule and the often contractually defined (but at default fiduciary) models of the various unincorporated business organizations. I. INTRODUCTION Compare, if you will, the following rather unambiguous rulings on the application of the business judgment rule in the context of an unincorporated business organization: "We have determined the business judgment rule may apply to partnerships, thus eliminating judicial review of business decisions in the best interest of the partnership if they are made in good faith and with the care of an ordinarily prudent person.
  • THE USE and ABUSE of TRUSTS – Presentation by Martin Lewis at the Private Client Panel at the Saint Petersburg International Legal Forum 2015

    THE USE and ABUSE of TRUSTS – Presentation by Martin Lewis at the Private Client Panel at the Saint Petersburg International Legal Forum 2015

    THE USE AND ABUSE OF TRUSTS – Presentation by Martin Lewis at the Private Client Panel at the Saint Petersburg International Legal Forum 2015 Introduction The great majority of off-shore trusts are probably ‘sham trusts’. That is to say, domestic and international trust law, official bodies and courts will not recognise them if they examine them closely, as they are often little more than glorified bank accounts, or the paperwork merely disguises a different reality. To design effective international structures involving trusts, an understanding of how the international law of trusts has emerged and developed can be helpful and which I look at in broad terms this afternoon. The sources of international trust law The briefest history of trusts helps one to anticipate what international trust law very probably provides in most ordinary situations, without going to the text books first and which essentially means an understanding of the roots of English trust law. Ancient Rome developed the concept of trusts on death, but it was in England in the 12th and 13th century that the concept of trusts created during the lifetime of the person creating the trust (who I shall refer to as ‘settlors’) emerged and this was in response to the practical problems of leaving land in the hands of perhaps an uncle or brother (in England women had effectively no property rights until the 19th century) when one went away to the Holy Land to fight in a crusade. Nobles returning from the Holy Land at this time were sometimes met by relatives to whom they had entrusted the management of their property, refusing to return property and so returning Nobles petitioned the King and who delegated the determination of these tiresome arguments to his Lord Chancellor and which is the origin of the Chancery Division of the English court system and the law of equity administered by that court.
  • Trust As E Relationship Treated by Common Law Legal Systems and As a Relationship Treated by Civil Law Legal Systems. Things In

    Trust As E Relationship Treated by Common Law Legal Systems and As a Relationship Treated by Civil Law Legal Systems. Things In

    European Journal of Sustainable Development (2015), 4, 2, 221-226 ISSN: 2239-5938 Doi: 10.14207/ejsd.2015.v4n2p221 Trust as e Relationship Treated by Common Law Legal Systems and as a Relationship Treated by Civil Law Legal Systems. Things in Common and Comparison between the Two Systems By Nertila Sulçe1 Abstract Inheritance relationships are born when the ownership was born and will exist as the property’s right herself. Inheritance is an ancient institution recognized by the Roman law in the Twelve Tables (303 BC) in which the testamentary right was given priority.Roman law had a well-developed concept of the trust (fideicommissum) in terms of "testamentary trusts" created by wills but never developed the concept of the inter vivos (living) trusts which apply while the creator lives. Trusts have existed since Roman times and have become one of the most important innovations in property law. A trust is a relationship whereby property is held by one party for the benefit of another. A trust is created by a settlor (the person who creates the trust), who transfers some or all of his or her property to a trustee (a person either an individual, a corporation or more than one of either who administers a trust).The trustee holds that property for the trust's beneficiaries (a beneficiary is anyone who receives benefits from any assets the trust owns). Personal trust law developed in England at the time of the Crusades, during the 12th and 13th centuries.The trust relationship was created by later common law jurisdictions. Trusts play a significant role in most common law systems, and their success has led some civil law jurisdictions to incorporate trusts into their civil codes.
  • Trustee Exculpation—The Law, the Quirks and the Business Sense

    Trustee Exculpation—The Law, the Quirks and the Business Sense

    Trusts & Trustees, Vol. 20, No. 9, November 2014, pp. 933–942 933 Trustee exculpation—the law, the quirks and the business sense Lawrence Cohen QC and Thomas Seymour Abstract Although the law on this subject has grown out of English case law, its development is now more Trustee exculpation clauses: the law as it stands– closely aligned to offshore trust centres such what duties/liabilities fall outside the standard as Cayman and the Channel Islands which are clause and/or cannot be lawfully excluded: the Downloaded from the engine rooms of modern trust law.1 meaning of ‘wilful default’–how far it extends in practice–the borderline with dishonesty. To what Amongst the consequences of which to be aware extent can the supine trustee rely on a clause which are both the legislative and public policy differences between jurisdictions. One example of a legisla- excepts wilful default? See the Weavering decision. http://tandt.oxfordjournals.org/ Is the ‘wilful default’ standard applied differently tive difference is the Guernsey provision limiting depending on remuneration, professional, and the ability to exculpate in new trusts (see business experience? Points arising on fraud or dis- Spread Trustee discussed below) and the inapplic- honesty. Are wide-form exculpation clauses a bad ability of many of the provisions of the Trustee Act thing? Special considerations affecting professional 2000.2 trustees: the standards applicable, and whether We are principally concerned with profes- such clauses relied on by professional trustees sional trustees who accept their trusteeships in by guest on October 16, 2014 bring the trust industry into disrepute.