A recent Court of Appeal ruling could mean higher legal costs for trustees and expose investment managers or advisers with trustees among their clients to increased liability.
Thousands of UK trustees, including those overseeing charities, schools and pension funds, may be forced to incur higher legal costs after a recent Court of Appeal ruling.
The decision, which overrules 35 years of case law and involves an unusual judicial U-turn, could have a far-reaching impact that will be expensive for trusts and their beneficiaries, and could trigger an increase in professional indemnity insurance rates for solicitors, barristers and other specialist trust advisers, which may mean higher fees for clients.
The Court of Appeal Judges said that years of decisions under a rule dating from 1975 and known as the rule in Hastings Bass were an “example of the law taking a serious wrong turn”.1
In fact, Lord Justice Lloyd, the Court of Appeal Judge who gave the leading judgment in the case, found that the rule in Hastings Bass was not actually “the rule in Hastings Bass”. Instead, Judges have, for at least two decades,2 been mistaken as to the true precedent set by the case.3
Please see full publication below for more information.