The Duty Of Confidentiality - And Its Limits

The Guernsey Court of Appeal has recently reviewed the general duty of confidentiality that trustees owe to beneficiaries and reminded us all that the duty of confidentiality is by no means absolute.

The Facts

In Re B (2012) (Judgment 35/2012), the Court of Appeal considered the use that a trustee may make of trust documents and information to protect itself against criminal charges.

The trustee, a subsidiary of an international banking group, was trustee of two Guernsey trusts, both of substantial value. The widow of the settlor of both trusts had initiated a criminal investigation in France into the trusts which was exploring a variety of serious offences against various parties, including possession of stolen goods, tax evasion and money laundering. The trustee had received a summons from the French judiciary responsible for the investigations to attend before the Court to answer questions concerning the trusts.