UK: What Right Do Beneficiaries Have To Request Information From Trustees?

Last Updated: 23 October 2018
Article by Charlotte Coombs

The recent case of Lewis v Tamplin (2018 EWHC 777CH) has provided further clarification of the position established in Schmidt v Rosewood Trust Limited (2003 UKPC 26) in relation to the rights of beneficiaries to disclosure of trust documents and the court's supervisory jurisdiction.

The Case

The case of Lewis concerned a deceased's estate where she had left her estate on trust for the benefit of her six children equally "for their own use and benefit absolutely and for them to devise bequeath or appoint during their lifetime or in their will as they individually shall decide". The trust included land which could potentially be developed. Four of the children died, some intestate and the claimants were their offspring. The claimants had requested various information from the trustees (including the two surviving children) to enable them to determine if the trustees had acted properly, particularly in relation to the dealings with the land.

Whilst initially the trustees did not accept that the claimants were beneficiaries, they subsequently accepted their view and provided them with 12 pages of trust accounts and copies of the option agreements with the developer for the land in the trust.

The trustees then argued that they had provided sufficient information but the court found for the claimants and further information was required to be disclosed.

Schmidt v Rosewood

Following the decision of the Privy Council in the case of Schmidt v Rosewood, the position was that a beneficiary has a right to seek the disclosure of trust documents as an element of the courts inherent jurisdiction to supervise the administration of the trust but no beneficiary had an automatic right to information concerning a trust. That said, it is generally accepted that the trust documents, including the accounts, will be provided in many situations although they may be redacted for the confidentiality of other beneficiaries. Legal privilege would apply to legal advice provided it has not been paid for by the trust fund or if it relates to a trustees' dispute with beneficiaries. If the legal advice has been paid out of the trust fund legal privilege cannot be asserted against beneficiaries, who have a right to that advice.

Moving Forward

Lewis has clarified the issue of disclosure. HHJ Matthews was satisfied the beneficiaries had requested the documents for "precisely the right reasons, to hold the trustees to account, and thus to vindicate their own beneficial interests, by way of an action for breach of trust if need be".

The court held that beneficiaries have a right to seek disclosure of trust documentation and the judgement contains useful examples of when information should be provided and who may be liable for the costs. This now means that the following are some of the principles governing the disclosure of documents:

  • The court will not be satisfied by the trustees' assertion that they had already provided the beneficiaries with sufficient information and further disclosure should not be made, but will consider the position as a whole.
  • Trustees are not generally required to disclose documentation relating to the exercise of their dispositive powers (for example minutes of meetings), nor provide a copy of the settlor's letter of wishes (although there are exceptions, for example divorce proceedings), but this protection does not extend to administrative functions as the trustees need to be held to account. Documents may however be redacted before they are released to ensure confidentiality is maintained.
  • Whilst legal privilege can be used as a reason not to disclose certain documents, this will not extend to legal advice which the trustees sought and paid for using trust money. Although the information may be privileged to third parties, this is not the position with beneficiaries. Trustees should therefore think carefully before using trust money and, if they wish to take advice for the benefit of themselves personally, pay for it out of their own funds.
  • Where the beneficiaries are seeking information which is not already in documentary form, it is the beneficiaries rather than the trust fund who are responsible for the costs of producing this.

Commentary

Trustees should therefore approach requests from beneficiaries for disclosure with care. As HHJ Matthews commented, "it may well be that, if the trustees had taken a less confrontational and more co-operative approach at the outset, all this litigation could have been avoided, and fewer documents (perhaps none at all) would now need to be disclosed". In the case of Lewis, the trustees were also personally liable for the costs of the claim, without the benefit of any trustee indemnity.

We often work for trustees and beneficiaries to help them consider the situation and guide them in relation to the information they should consider disclosing/requesting.

Posted on 16 Aug 2018

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 Mondaq.com.

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
Bishop and Sewell LLP
Withers LLP
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Bishop and Sewell LLP
Withers LLP
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
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

Mondaq.com (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 www.mondaq.com

To Use Mondaq.com 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.

Disclaimer

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.

General

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