Trusts in mixed jurisdictions

Abstract

Closed legal systems are gone in modern world, “mixed” legal systems have become the norm. That has made so-called “transplants” easier but, contrary to a widely held view, legal institutions cannot be transplanted. English trust rules even less, for they are not a coherent set of rules. The British attempted to legislate on trusts for their colonies, for instance for Ceylon (the present-day Sri Lanka), and were thus obliged to be coherent. That made it necessary to introduce new legal concepts with unforeseeable consequences. A wave of legislation followed the adoption of the convention “On The Law Applicable To Trusts And On Their Recognition” by the 15th session of the Hague Conference on private international law (1985); it gave birth to the “international model” of trusts that quickly became the favourite setting of the rich and ultra-rich. Jersey in the Channel Islands was the leading jurisdiction, many others followed but it was not until the establishment of the International Finance Centres in the Gulf and later in Kazakhstan where “the laws of England and Wales” are taken as a source of law and local courts are staffed by former English judges or in any event by lawyers brought up in the common law that a proper transplant of the English trust took place. A totally different legal setting witnessed attempts to create imitations that had to run against well-established civil law conceptual attitudes that did not allow the existence of more than one patrimony per person or the segregation of assets within one person’s patrimony. In 2022 France decreed that each businessman is automatically the owner of two patrimonies; that open the way to a radical re-thinking of civil law notions. Québec and Louisiana are taken as examples of civil law legislation on trusts but Québec has followed its own idea that the assets that form the object of a fiducie belong to nobody, while Louisiana’s Trust Code is a deft admixture of civil law and common law elements based on the civilian notion of “fiduciary”. Luxembourg, France and other civil law countries are then examined: the focus then is on South Africa and Scotland, two countries which have a common past in a shared period of the European ius commune and a common present in being both orphaned from a cultural lineage that provided answers to current matters by drawing on Roman law. Now they both solve the problem of the patrimony by holding that a trustee has more than one patrimony, his own and then one for each trust of which he is the trustee.