Trustee exculpation--the law, the quirks and the business sense

Abstract

Trustee exculpation clauses: the law as it stands–what duties/liabilities fall outside the standard clause and/or cannot be lawfully excluded: the meaning of ‘wilful default’–how far it extends in practice–the borderline with dishonesty. To what extent can the supine trustee rely on a clause which excepts wilful default? See the Weavering decision. Is the ‘wilful default’ standard applied differently depending on remuneration, professional, and business experience? Points arising on fraud or dishonesty. Are wide-form exculpation clauses a bad thing? Special considerations affecting professional trustees: the standards applicable, and whether such clauses relied on by professional trustees bring the trust industry into disrepute. The need to explain the clause to the settlor and solicitors’ potential liability for not doing so.