Avoiding litigation – tips for trustees

Despite a trustee’s best efforts, even the most reasonable and conscientious trustee can end up being dragged into litigation. There is the possibility that if the dispute came to court, they may consider that a trustee’s behaviour was unreasonable and the trustee could find themselves personally liable and unable to rely on their indemnity.

However, there are some tips for trustees to try and avoid costly and often acrimonious litigation:

  1. Trustees should avoid ‘knee-jerk’ reactions when they are confronted with a suggestion of wrongdoing or a request with which they feel uncomfortable. This type of reaction may polarise the parties at an early stage and mean that any issues are far more difficult to resolve. Trustees may find it helpful to think practically about the potential ways of satisfying all parties. This may be achieved by taking a step back from the situation and imagining if your correspondence and/or actions were being looked at by the court;
  2. Maintain detailed and up-to-date records. Files need to be kept up to date, meetings promptly minuted and trust accounts prepared properly;
  3. Provide beneficiaries with enough information that they can hold a trustee to account. Simply refusing requests for information is not helpful and may be criticised by the court;
  4. Tone is important – trustees should endeavour to appear reasonable and to genuinely engage with the beneficiary’s concerns (even if the beneficiary is uninterested in reconciliation or resolution). There is the risk that the court may replace the trustee with someone that may be able to work more harmoniously with the beneficiaries if there is a ‘war of correspondence’ between trustee and beneficiaries;
  5. If you are in any doubt, take advice and make sure you do this at an early stage; and
  6. If all else fails, focus on being ‘reasonable’!

Please contact a member of the Private Client team at Barker Gotelee, Ipswich solicitors, for more information.

Katie Emerson is a solicitor in the private client department at Barker Gotelee, Ipswich solicitors.

Personal Solicitors Ipswich – for more information on our range of legal services, please call the team on 01473 611211 or email bg@barkergotelee.co.uk