Current Projects

Trusts

Commissioner
Professor Joseph Thomson
Mr Colin Tyre QC (for Variation and Termination of Trusts)

Team members
Mr Charles Garland, Project Manager
Miss Susan Robb, Solicitor
Miss Rebecca Reid, Legal Assistant

A wide-ranging review of trust law is being conducted. The current law is based to a large extent on the Trusts (Scotland) Act 1921 and late 19th century cases when the social and business background was different from that of today. An Advisory Group of practitioners and academics has been set up to assist the Commission.

The first phase has concentrated on trustees' functions. Three discussion papers have been published: Breach of Trust (DP 123, 2003), Apportionment of Trust Receipts and Outgoings (DP 124, 2003) and Trustees and Trust Administration (DP 126, 2004). Comments have been received on all these papers. The proposals in the third discussion paper on use of nominees and delegation in the investment field were widely supported and were implemented in the Charities and Trustee Investment (Scotland) Act 2005. That Act also implemented the Scottish recommendations about trustees' powers of investment in the earlier joint Report on Trustees' Powers and Duties (Scot Law Com No 172, Law Com No 260, 1999).

The second phase looks at trusts and three aspects have been studied so far. The first topic, variation and termination of trusts, deals with the variation and termination of private trusts by the beneficiaries or the court and the reorganization of charities, non-charity public trusts and endowments. A Discussion Paper, Variation and Termination of Trusts (DP 129) was published on 15 December 2005 and was followed by the Report on the Variation and Termination of Trusts (Scot Law Com No 206) published on 30 March 2007. The second topic examines the dual patrimony theory in the fields of trustees' ownership of trust property, their liability to third parties and insolvency; and when trusts come into effect as regards the trustees and the beneficiaries. A Discussion Paper, Nature and Constitution of Trusts (DP 133) was published on 26 October 2006. The third topic deals with various ways in which trustees may become liable to third parties for their actions. We examine contractual and delictual liability and liability for litigation expenses. Other areas of liability are also considered. A Discussion Paper, Liability of Trustees to Third Parties (DP 138) was published on 7 May 2008. Comments were invited by 31 August 2008, if possible by using our electronic response form. However, it is not too late to submit comments, and they will be taken into consideration if received over the autumn.

Other discussion papers are planned on restrictions of long-term private trusts and accumulations of income, and on beneficiaries' remedies against trustees and third parties.

For more information, please contact: charles.garland@scotlawcom.gov.uk

Page last updated: 4 September 2008