Article by Sterling H. Cooke
Questions marks are constantly raised over the performance of a
trustee's duties and whether the trustee in question has
discharged its obligations in fulfilling those duties. To assist
the trustee in protecting itself, the trustee in the majority of,
if not in all, cases will look to the protection afforded to it or
them by any exoneration clause included within the Trust Deed.
Given the ever increasing complexity of a trustee's duties in
the 21st century, this issue has been of great interest to
trustees.
Exoneration clauses were introduced to give protection to
trustees from liability where the trustee had acted in good faith
and such clauses allowed trustees, who would not otherwise have
been prepared to accept such a position, to make decisions with the
requisite speed and confidence in an increasingly litigious
environment. But how sturdy are exoneration clauses in
practice?
