Professional Negligence and Liability

Chapter 21



1.  Scope of the chapter

21.1 This chapter deals with the liabilities to which professional trustees are subject by reason of their professional status and is concerned with professional trustees who have been expressly appointed, as opposed to constructive trustees.

2.  Meaning of “professional trustee”

21.2 The term “professional trustee” is capable of applying to:
  • (a) a person or (more usually) a corporation whose business is that of administering trusts;
  • (b) a professional person who is appointed as a trustee.


1.  Under the general law

21.3 A trustee must obey the trust instrument and the rules of equity in so far as they leave him no discretion and simply prescribe what he can and cannot do. To that extent his duty is one of strict liability, in the same sense as, for example, a solicitor is liable without proof of negligence if he disobeys his client’s instructions and loss results. The duty of care applies to the exercise of a trustee’s discretions and to all other matters of judgment relating to the administration of the affairs of the trust. The duty of care requires a trustee to use the same degree of diligence and care in the performance of those duties that an ordinary prudent businessman would use in his own affairs. 21.3.1 The general principle, as expressed in Speight v. Gaunt,1 is that:

“A trustee sufficiently discharges his duty if he takes in managing his trust affairs all those precautions which an ordinary prudent man of business would take in managing similar affairs of his own.”

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