This post has been contributed by Amanda Taylor, University of London Teaching Fellow for Equity and Trusts.
The question is not a new one. Most students of Trusts will (or should be) familiar with the case of Schmidt v Rosewood [2003] 2 AC 709, a Privy Council case that discussed and made clear the difference between any possible proprietary rights over documents (of which more later) that the beneficiaries might have and the need of the trustees to keep the beneficiaries informed without giving every detail.
It was stated in the Privy Council case that “no beneficiary (and least of all a discretionary object) has any entitlement as of right to disclosure of anything which can plausibly be described as a trust document.”1
The case was further discussed in the case of Breakspear v Ackland [2008] EWHC 220 (Ch), addressing the fine line between ‘disclosure’ and ‘confidentiality’ in trusts. The main difference between the two is the element of the trustees being able to keep family matters that had been discussed in confidence away from the prying eyes of beneficiaries who might seek to extract such information.
The whole thrust of this point is that some beneficiaries believe they should be allowed to know details as to why decisions have been made. Trustees argue that some information is confidential and so it is a question of either proprietary ownership, or not, since beneficiaries are the proprietary owners of the property but not the legal owners.
The intention has never been to ‘hide away’ relevant information from the beneficiaries but not to disclose the finite details as to why decisions have been made. The reasons are deemed unnecessary in most instances, a good example being letters of wishes that are not automatically disclosable.
More recently the case of Dawson-Damer v Taylor Wessing LLP [2020] EWCA Civ 352 made a clear distinction between requests for disclosure and legal professional privilege . The latter is described by the Law Society2 as a right and “protects from disclosure confidential communications, and material evidencing such communications, that take place between clients and their lawyers and in some circumstances also between clients/lawyers and third parties.” However, it was stated that the privilege could not be used to exclude the beneficiaries from obtaining material.
The whole premise for the judgement seems to hinge on the fact that if it was sight of legal advice that was being asked for then the beneficiary was able, by right, to see it if it contained their personal data because it was considered to be ‘joint privilege’.
The Taylor Wessing case was particularly interested in the right to seek documents as the Trust was under Bahamian law, but the issue was that the records were filed and defined under English law and therefore the legal professional privilege was protected by the 1998 Data Protection Act.
Further analysis looked more deeply into the difference between joint interest privilege and common interest privilege. If the privilege is joint, it is asserted that neither party has a priority over the other whereas the common interest privilege is one where the information can be shared with those who have the right to it without disclosing it to others without that right.
Further cases, Aabar Holdings SARL v Glencore PLC & Ors [2024] and Jardine Strategic Limited (Appellant) v Oasis Investments II Master Fund Ltd and 80 others (Respondents) No 2 (Bermuda) [2025] UKPC 34 have gone into further clarification.
In Aabar Holdings the judge looked at the ‘Shareholder Rule’ which was purported to prevent companies from using legal professional privilege as seen above. The rule appeared to derive from the fact that the shareholders were considered to have proprietary rights over the assets of the company. That assertion had a dubious, if not long-lived (135 years), basis and has now been overturned following this case.
The Jardine Case followed Aabar and has cemented the finding.
What does this mean for Trusts? Although the trustees are the legal owners of the trust property the beneficiaries are the only ones to benefit from that property and as such are deemed to hold a proprietary interest in the assets, a right which can be asserted over the trustees.
It seems that there are interesting and complex reasons as to why beneficiaries and/or shareholders may want to see how and why decisions have been made and equally interesting and complex reasons why those decisions are not disclosed.
The two later cases cited that fact that the information, were it freely accessible may well have been read by those who were not actual shareholders and therefore had no legitimate interest at all.
It is certainly an area where ‘ask and you will receive’ is not a given conclusion.