Guernsey: Mediation In Trust Disputes

Last Updated: 9 February 2012
Article by Christian Hay

Much has been made in recent years of the desirability of mediation as a means of resolving disputes without resorting to litigation.

Indeed, the requirement for parties to consider alternative dispute resolution has now been enshrined within the Guernsey Royal Court Civil Rules, 2007. It is clear that mediation can be a useful and costeffective alternative to litigation, but how useful might it be as a means of resolving trust disputes? Should it be the obvious choice of alternative dispute resolution procedure when dealing with trusts? In general terms, mediation has many advantages: it is quick to arrange, confidential, without prejudice and can be completely private should the parties wish it to be. This provides an opportunity for creative and flexible ideas to be tabled in the hope of resolving disputes, which might otherwise be unavailable in a formal court setting, without needing to commit to such ideas unless mutual agreement is reached.

It is also generally less expensive than litigation, though it cannot be said to be the "cheap" option as the parties will generally be required to pay for a venue for the mediation, their own expenses (including legal fees if represented) and of course the mediator.

The mediator is the neutral party, able to facilitate the discussion and provide expertise, as well as assisting the parties in their negotiations. The key advantage that mediation has over litigation in a dispute is that ultimately the parties are in control of the negotiation, the settlement and any binding agreed terms.

Either party can walk away at any time, safe in the knowledge that litigation is still an exercisable option. Conversely, choosing litigation at the outset of a dispute can mean submitting to a result which is more likely to be imposed than agreed. Litigation is expensive, slow and out of the control of the parties.

Looking at trust disputes more specifically, it is the family context of trusts that makes them especially suited to mediation; personal feelings of wrongdoing are often responsible for trust disputes at the outset. The family context of trust disputes can often also mean that the dispute or grievance has no legal basis, making it difficult for the courts to provide an effective remedy.

Mediation provides an open forum for those involved in which the grounds for the dispute, both legal and otherwise, can be discussed and resolved in an open manner, under the watchful eye of the mediator. In this way it is less confrontational than litigation but it can still provide injured parties the feeling that they are justly getting an opportunity to air their grievances and offer explanations without being subjected to crossexamination. In the family trust context, litigation can cause rifts not easily mended. By having a solution imposed upon the parties by a court, one side is invariably going to feel that justice has not been done. This can cause irreparable damage, not just by the outcome, but also by what 'skeletons' may be disclosed about a party during the course of the proceedings.

This is not to say that mediation will always be the dispute resolution tool of choice; it does have its disadvantages. For one thing, it is never a forgone conclusion that mediation will even solve the dispute in question. Further, given the open nature of mediation, either party may walk away at any time, even before any progress is made.

Finally, some disputes are simply not suitable for mediation, such as when a point of law cannot be resolved without the decision of a court or when the structure of the trust itself is being questioned. One should also consider whether mediation will be in the best interests where minors, vulnerable or unascertained beneficiaries are involved - will the mediator be able to see where they are being forced into a disadvantageous compromise? In such situations, the court has the power to appoint personal representatives to look after the interests of those beneficiaries.

When considering whether or not to utilise mediation, the trustees themselves will need to consider whether mediation will be in the best interests of the beneficiaries, whether they have an obligation to pursue alternative dispute resolution in the first instance (in relation to external disputes, the answer will invariably be "yes", but not necessarily with regard to internal disputes), and whether they have the power as trustees to spend the money of the trust on alternative dispute resolution. In this regard, it may be advisable for the trustees to carefully review the trust deed and further potentially to seek Beddoe relief from the court to avoid the possibility of personal liability for costs.

However, it is important to note that section 31(2) of the Trusts (Guernsey) Law, 2007 (the "Trusts Law") gives trustees the power to settle or compromise any claim in relation to themselves or in any way related to trust property. Following on from this, section 32 of the Trusts Law permits a trustee to use trust assets to consult professional persons in relation to the affairs of the trust. These two sections together could operate to allow trustees to first pursue mediation and second to use trust assets to employ a mediator, but not to engage in litigation (see reference to Beddoes relief above).

Whether or not mediation is the appropriate forum for resolving a dispute related to trusts, will largely depend upon the situation in which the dispute has arisen. It is clear that mediation will not resolve all trust disputes, and going down such a road will need to be carefully considered by the trustees and their advisers.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions