The Myth of the Remedial Constructive Trust

Abstract

Remedial constructive trusts are held out as a way for the courts to make better decisions: freed from the strictures of rules, courts would be better positioned to do justice on the facts, tailoring a remedy to the circumstances of the case. If this were true, their rejection in English law would be a serious failing. But a closer look at the relationship between rules and discretion suggests that it’s not true and that, when discretion is in genuine opposition to rule-determined decision-making, the outcome is not more justice but less. Moreover, when we look to the arguments of those calling for remedial constructive trusts to be introduced into English law and to those jurisdictions that claim to recognize them, this much seems to be agreed. Such differences as there are go instead to the substantive rules that govern the operation of constructive trusts. So the question English law faces is not whether we should recognize some ‘new model’ of constructive trust, but rather the more familiar inquiry into what rules are best. In addressing this question, the idea of the ‘remedial’ constructive trust is only an unnecessary distraction.