- within Real Estate and Construction topic(s)
Key takeaways
- A landmark ruling on protector powers. The Privy Council has fundamentally reasserted the internal balance of power within modern trusts, holding that protector consent provisions may confer an independent discretion—not merely a supervisory check on trustee decision-making.
- The 'wide versus narrow' debate is settled. The long-running controversy is now decisively resolved at the highest appellate level in Bermuda: a protector is not merely a referee—they can be a power-holder in their own right.
- Drafting precision is paramount. If settlors intend a protector's role to be limited to that of a 'watchdog', the trust instrument must say so in clear and unequivocal terms.
On 19 March 2026, the Judicial Committee of the Privy Council delivered its landmark judgment in A and others v C and others [2026] UKPC 11 (also known as Re the X Trusts).
Introduction
On 19 March 2026, the Judicial Committee of the Privy Council ('Privy Council') delivered its landmark judgment in A and others v C and others [2026] UKPC 11 (also known as Re the X Trusts), an appeal from Bermuda endorsing the 'Wider Role' of a trust protector in the exercise of consent powers.
In its judgment, the Privy Council has fundamentally reasserted the balance of power between trustees and protectors, holding that a protector's consent may involve the exercise of an independent and substantive discretion rather than a merely supervisory check. Departing from a narrow 'watchdog' conception, the Board has recognised that, depending on the terms of the trust, a protector may be entitled to withhold consent even where the trustee's decision is itself rational and proper. In effect, the protector is elevated to a position of genuine influence within the trust's governance structure.
The issues: Wider or Narrow Role?
In Re the X Trusts, the trust documents for a number of trusts provided for the appointment of a 'Protector' or 'Protectorate' and required that the trustees ('Trustees') would not exercise certain powers 'without obtaining the prior written consent of the Protectorate' (the 'Consent Powers').
A dispute arose concerning whether, in exercising the Consent Powers, the Protectors' role is:
- to exercise an independent discretion, entitling them to withhold consent even where the proposed exercise is one a reasonable body of properly informed trustees would be entitled to undertake (the 'Wider Role'); or
- merely to satisfy themselves that the proposed exercise is one a reasonable body of properly informed trustees would be entitled to undertake (the 'Narrow Role').
At first instance, the Supreme Court of Bermuda (Kawaley AJ) held that the protectors have the Narrow Role—that of a 'watchdog' ensuring due execution of trustee powers. The Court of Appeal dismissed the appeal.
The key issue before the Privy Council was therefore whether, in exercising the Consent Powers, the Protectors have the Wider Role or the Narrow Role.
The decision: the Wider Role
In a unanimous decision, the Privy Council allowed the appeal and held that the Protectors have the Wider Role. Lord Briggs and Lord Richards delivered the judgment (with which Lord Reed, Lord Stephens and Lady Rose agreed), overturning the decisions of both the Supreme Court of Bermuda and the Court of Appeal of Bermuda.
The Board reframed the central question. Rather than treating the issue as a binary choice between two predetermined roles, the Board held at [83] that the correct approach is to ask: what, if any, constraints did the trust instrument actually impose upon the protectors, construed in context and with regard to any constraints imported by the general law?
The Board observed that, in principle, where a legal document gives to one person a power to veto a proposed action by another, the starting point is that the recipient of the power is under no constraint as to how that power of veto is exercised, save perhaps a requirement of good faith. The Board found no express language in the trust instruments imposing constraints that would confine the Protectors to the Narrow Role (at [100]).
While the trusts conferred powers on the Protectors as fiduciaries—and, therefore, the Protectors were subject to the well-known no-profit, no-conflict and proper purpose duties—these constraints operated within and in harmony with the Wider Role, and came 'nowhere near confining the Protectors to the Narrow Role' (at [94]).
The Board identified several features of the trust instruments that positively supported the Wider Role:
- Power to release or waive consent: The Protectors were given power permanently to release, extinguish or restrict their powers of veto. If the settlor had intended the Protectors to fulfil the Narrow Role—and so have a fiduciary duty to check the legality of trustee decisions—it would be difficult to understand why they should have been given power to abdicate that role entirely (at [103]-[104]).
- Provision for non-unanimous Protectors: Where joint Protectors could not agree, the Trustees were free to proceed without consent, provided they consulted with each Protector and took their views into account. This made sense under the Wider Role but was difficult to reconcile with the Narrow Role—it would mean that even where one Protector considered the proposal unlawful, the Trustees could proceed regardless (at [105]).
- Limited scope of consent requirement: The Protectors' consent was required only for a limited range of particularly important decisions (capital appointments and dealings with specified securities). If the Narrow Role were intended, one might expect it to apply more broadly to guard against any potential breach of trust (at [107]).
The Board rejected the argument that the Wider Role would lead to deadlock between trustees and protectors. While acknowledging that disagreement was possible, the Board noted that the possibility of deadlock was 'deliberately built into the structure' by the settlor in choosing to appoint a protector with consent powers, and that 'it is the duty of both trustees and protectors to seek to find common ground' (at [113]).
Further, if the Narrow Role were intended, it might be expected that appointment as Protector would by the terms of the settlement be restricted to those most obviously qualified to assess the legality of the Trustees' proposed action, such as lawyers with specialist experience in trust matters (at [109]).
Finally, the Board declined to imply a term limiting the Protectors to the Narrow Role. It held that any such term would not be necessary to make the X Trusts workable in practice, and would not satisfy the officious bystander test (at [118]). The Board concluded that, insofar as the absence of a precisely specified role for the Protectors may be seen as a gap in the Protector Provisions, it must be taken to have been a deliberate gap—and 'there is simply no peg on which to hang the Narrow Role' (at [118]-[119]).
Implications for offshore jurisdictions
The Privy Council has redefined the role of the protector—not as a safeguard, but as a participant in power. For offshore jurisdictions, the implications could be profound.
Bermuda
In Bermuda, the Supreme Court and Court of Appeal decisions endorsing the Narrow Role have now been overturned. It is now clear that the Wider Role of a protector is to be preferred where the scope of the protector's consent powers is not expressly set out in the trust deed. From a practical perspective, the ruling places a renewed emphasis on careful drafting: if settlors intend a protector's role to be one limited to that of a 'watchdog', the instrument will need to say so in clear and unequivocal terms.
Jersey
The Privy Council's decision confirms the approach that had already been adopted in Jersey, whose Royal Court had adopted the wide role as the correct test.
This issue had already come before the Royal Court in Re Piedmont and Riviera Trusts [2021] JRC 248 ('Piedmont') (in which Walkers' Nigel Sanders acted for the trustees). In that case, the Royal Court disagreed with the approach the Supreme Court of Bermuda's was taking in Re the X Trusts, and instead found that Protectors have an independent discretion and can veto a proposed action by the trustees, even if it is one that a reasonable body of trustees could take (i.e. the Wider Role). The Privy Council has now vindicated that approach and agreed with the Royal Court.
Guernsey
To date, the Guernsey courts have not sought to resolve this issue directly. However, the courts are likely to treat the Privy Council's judgment as highly persuasive authority when construing protector provisions, especially given that the Board expressly acknowledged that the question in issue is 'one of general public importance for offshore trusts and settlements generally, extending well beyond the settlements in question'.
Of particular significance for Guernsey practitioners is the Board's express endorsement of the Royal Court of Jersey's reasoning in Re Piedmont, which concluded that protectors with consent powers have the Wider Role. Given the close legal relationship between Guernsey and Jersey and the weight traditionally afforded to Privy Council jurisprudence in the Crown Dependencies, trustees administering Guernsey trusts may now proceed on the basis that, absent express wording to the contrary, protectors with consent powers are entitled to exercise independent discretion in deciding whether to give or withhold consent, rather than being confined to reviewing the legality of trustees' proposals.
Cayman Islands
Similarly, the Cayman Islands courts have not yet directly resolved this issue. When considering protector consent provisions in the Cayman Islands, Kawaley J observed in Re the B Trust (unreported, Grand Court of the Cayman Islands, 10 June 2024) that the extent of a protector's consent power - whether broad or limited in scope - had remained a 'controversial' question. In that case, the judge noted that such controversy could be 'circumnavigated through clearer language' in the trust instrument. In that respect, the Cayman court effectively treated the issue as one capable of being resolved by careful drafting.
Following the Board's decision in the Re the X Trusts, it appears that trustees must now navigate a potentially more complex decision-making landscape in which protector approval cannot be assumed to follow a rational proposal. The precise wording of consent provisions will also be critical in determining the scope of a protector's role.
Practical guidance for practitioners
Practitioners advising on existing trusts should assess the likely scope of protector powers to ensure that such powers align with their intended role. Generic consent provisions will likely be construed as conferring the power for a protector to veto a decision of the trustees, even if it is one that a rational body of trustees could make, unless the instrument uses explicit language limiting the protector's discretion. Practitioners drafting new trusts who wish to confer narrower protector powers should use express wording.
Where the Wider Role applies, trustees will need to consider reaching a decision that is not only rational, but one that is persuasive to the protector and to anticipate and address protector concerns proactively. Engagement becomes critical and protectors may expect greater participation in the decision process.
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.
