Royal Court clarifies limits of customary law exception in respect of time-barred breach-of-trust claims brought by incoming trustee

The Jersey Royal Court has ruled that where a newly incorporated private trust company (PTC) recently appointed as successor trustee seeks to bring claims for breach of trust against predecessors, it will not be able to benefit from the Jersey law doctrine of empêchement d’agir (which can stop the limitation clock from running in situations of practical impossibility) where it was not in existence at the time that the deadline for bringing claims had expired.

The first to third plaintiffs were beneficiaries of a Jersey law discretionary trust and had brought claims said by the plaintiffs to be valued at around £130m against the first to third defendants, as former trustees, for alleged grossly negligent investment decisions. The fourth defendant had been the provider of trust administration services and was being sued for breach of contract and tortious duties said to be owed to the trust and on the basis of vicarious liability for the first defendant.

The third defendant had retired as a personal trustee in 2007 and the first defendant had retired in July 2009. The second defendant was a PTC that had continued as trustee until December 2012; its directors had included both the first and third defendants until the date of the PTC’s retirement in favour of a new PTC, Delarose. The latter PTC had been incorporated at the behest of the beneficiary plaintiffs just a day before assuming its role as trustee in December 2012…

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