Building Trust(s) In Arbitration

The Law Commission's 14th programme of Law Reform includes a commitment to consider whether, and how, the law could be amended to facilitate trust law arbitration.

Trusts are frequently used in commercial transactions, including for bond issuances and certain types of security. They are also commonly used as a means of managing private wealth, funds and high value assets. Yet probably (there is a dearth of cases) English law does not currently recognise the validity of a clause in a trust deed that purports to refer 'internal' trust disputes between trustees and beneficiaries to arbitration. This is for two reasons.

First, the trust is a creature of the English courts (of equity), and the courts have an inherent supervisory jurisdiction to determine the rights of beneficiaries and trustees, alongside certain statutory and non-statutory powers to administer the trust.