Contentious Trusts And Estates

Bircham Dyson Bell LLP, like everyone involved in the trusts world, is seeing not only an increase in litigious disputes relating to trusts and estates, but also many matters that are showing clear signs of contention and the question is whether a satisfactory settlement will be possible. As a result, Helen Ratcliffe, Head of Private Wealth, and Richard Langley, Head of Litigation, are delighted to welcome Nicholas Holland to Bircham Dyson Bell as the new Head of Contentious Trusts and Estates. Nick's heavyweight experience in this field will draw additional strength from the knowledge and expertise of the existing Contentious Trusts and Estates Team, which crosses the boundaries of the Private Wealth and Litigation Groups.

Why are contentious trusts and estates so important now?

Cases soar

When their expectations are disappointed people turn increasingly to litigation, and the fallout of the economic crisis in 2008 means that there are currently many disappointed people. Figures from the Ministry of Justice show that the number of claims in the High Court involving trusts jumped nearly 240% between just 2008 and 2009.

It would not be surprising if that trend is maintained, or even accelerated - and of course the cases that have actually reached court are only a fraction of those where a dispute has arisen and the threat of litigation is seen as a lever to achieve a good outcome.

The statistics in the High Court are matched by a seemingly inexorable rise in litigation in the offshore jurisdictions. This will often involve London advisers for some angle of the problem.

The demise of the Hastings–Bass principle?

The Hastings–Bass principle has led to much litigious activity in recent years, both offshore and onshore, as trustees in particular have sought the court's blessing to avoid the consequences of actions that had turned out to be unfortunate. The Court of Appeal in London has recently handed down a robust judgment saying that the law had "taken a wrong turn" by developing the so-called principle in Hastings-Bass, and that relief will no longer be available on this basis.

If that judgment stands (it is not yet certain whether there will be an appeal to the Supreme Court) then the scope for a relatively consensual resolution of difficulties will be greatly reduced, and an increase in hostile litigation against advisers can be expected. The decision will also, if it stands, leave the UK strangely out of kilter with the offshore...