Further thoughts on mediation - trustees and the Mexican stand-off!
24th April 2020

It is not uncommon for trustees to disagree on how a trust should be dealt with especially when one of them has an interest as a beneficiary, but what is to be done when there is deadlock between them?

An obvious solution would be to remove the problematic trustee, especially if it is clear that one person is being “unreasonable” but this is easier said than done. The Courts try to avoid involvement in trusts and this includes deciding whether or not a trustee should be replaced. Even the test under section 41 of the Trustee Act 1925 shows a reluctance to intervene. The Court will only make an order to substitute a trustee if it is “inexpedient, difficult or impractical” to substitute or appoint an additional trustee without the aid of the Court. This is a high threshold to pass. The Court’s inherent jurisdiction is not much easier to invoke either. Mere disagreement is not enough. The point has to have been reached whereby the administration of the trust itself is threatened.

For this reason, it is vital to try to avoid litigating the matter and risking costs for an application with a real risk of failure. What can be done instead? As with so many disputes the answer is likely to lie in mediation.

The key to every mediation process is preparation from the parties. The focus should not be on why the trustee should be removed or replaced but how to reach a decision on the administration of the trust – to look forwards and not back – and then to find the compromise that informs that decision. The process involves tackling the underlying issue rather wasting time on recrimination.

Success is not guaranteed of course but if you don’t try it then as previous articles have said, stand by for some criticism from the Court. Even if the matter is not resolved at mediation the cost of preparing will not be lost as statements of needs and resources and documents in support will have been prepared, and the real points of difference isolated and narrowed. The use of a third-party mediator may be enough to reach a conclusion but if not an early neutral evaluation focuses minds on the outcome and the parties may agree to be bound by this.


College Chambers offers remote services to help your client resolve disputes during these challenging times.

We are able to offer your clients the following remote services:

  • IFLA Family Finance Arbitrators
  • IFLA Children Act Arbitrators
  • Chartered Civil Arbitrators
  • Private FDRs
  • Accredited Mediators
  • Private Pre-Trial Settlement Hearings
  • Civil Dispute Determination

To speak to us in more details about these services please contact us on 023 8023 0338.

You can contact all of our barristers directly by e-mail on initialsurname@college-chambers.co.uk.

Head of Chambers, Derek Marshall, is a qualified Civil Disputes Mediator and has been involved in resolving hundreds of disputes through mediation. Derek is also an IFLA Arbitrator and is an accredited Family Finance Arbitrator.

Derek can be contacted at DMarshall@college-chambers.co.uk

 

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