This chapter was originally published in The Dispute Resolution Review - 8th Edition.
I INTRODUCTION TO THE DISPUTE RESOLUTION FRAMEWORK
Jersey is a self-governing British Crown Dependency. It is the largest of the Channel Islands. It is not part of the United Kingdom and is not a member of the European Union. Originally part of the Duchy of Normandy, it has owed its allegiance to the British Crown for over eight centuries. It has always maintained a separate legal system from Britain, as well as its own legislature and tax system.
Jersey law derives from legislation and customary law (a concept similar to common law). Most modern legislation emanates from the Island's legislature, the States of Jersey. Occasionally the UK parliament extends its legislation to Jersey, but only with the consent of the States of Jersey.
Jersey customary law derives from a variety of sources, including Norman customary law, the French Code Civil and English common law and statute. The sources relied upon vary depending on the area of law: typically the areas of law with the oldest origins – such as immoveable property and succession – rely most heavily on Norman customary law, while areas that have developed more recently, such as tort, administrative law and criminal law, are heavily in uenced by English authorities. Jersey contract law is a blend of English and French law. The law of trusts has developed relatively recently and is rooted in English law and procedure, but it has been governed by a Jersey statute since 1984 and there are some significant local differences from English trusts law.
Jersey's principal court is the Royal Court, presided over by the Bailiff , the Island's chief judge. All but the most minor civil and criminal cases are heard there. The Bailif is assisted by jurats, who are the judges of fact in all civil cases. Here are 12 full-time jurats, elected by the Jersey legal profession and the legislature. Jurats need not be legally trained but typically have long experience of professional, business or civic life. Two jurats sit with the judge in civil trials.
The Deputy Bailiff and a number of Commissioners also exercise the Bailif's judicial functions. As well as local Commissioners drawn from the Jersey Bar there are a number of specialist overseas Commissioners, appointed from time to time to hear particular types of case. ey are typically British QCs or retired High Court judges.
Civil appeals are to the Jersey Court of Appeal. Its members include the Bailiff and Deputy Bailiff of Jersey, the Bailiff of Guernsey, and a number of lawyers from Commonwealth jurisdictions, the majority being British QCs or former judges.
The ultimate appellate court in civil matters is the Judicial Committee of the Privy Council, in London. Only decisions of the Privy Council on appeals from Jersey are binding in Jersey, although appeals from other jurisdictions may be persuasive in Jersey.
II THE YEAR IN REVIEW
i Federal Republic of Brazil and another (Respondents) v. Durant International Corporation and another (Appellants) (Jersey)  UKPC35
The Privy Council has confirmed that it is possible in Jersey law to rely on the principle of 'backwards tracing' in order to identify and recover an asset.
Where a duciary has misapplied assets held on trust, provided the property remains identi able, the victim of that breach of trust can trace any asset substituted in place of the misapplied asset and assert a proprietary interest in the proceeds. Here is a formalised set of rules to identify the traceable proceeds of an asset as properly belonging to the victim of the misapplication. 'Backwards tracing' is an approach that can be used to combat techniques exploited by fraudsters to manipulate the timing of payments from bank accounts to break the link between the source of the funds and its traceable proceeds and frustrate a tracing claim on based on the normal rules. Backwards tracing is surrounded by controversy because it seems to violate the requirement that a victim of a breach of trust can only trace the proceeds of what he can properly prove belonged to him.
The Privy Council upheld the Royal Court's decision that backwards tracing is permissible provided that there is evidence of a concerted coordination between the depletion of the trust fund and the acquisition of the traceable asset, looking at the whole of the transaction. It had previously been unclear whether or not 'backwards tracing' was recognised in Jersey law. The Privy Council noted that:
The development of increasingly sophisticated and elaborate methods of money laundering, often involving a web of credits and debits between intermediaries, makes it particularly important that a court should not allow a camouflage of interconnected transactions to obscure its vision of their true overall purpose and effect. If the court is satisfied that the various steps are part of a coordinated scheme, it should not matter that, either as a deliberate part of the choreography or possibly because of the incidents of the banking system, a debit appears in the bank account of an intermediary before a reciprocal credit entry. The availability of equitable remedies ought to depend on the substance of the transaction in question and not upon the strict order in which associated events occur.
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.