Trust disputes—costs
Trust disputes—costs

The following Private Client practice note provides comprehensive and up to date legal information covering:

  • Trust disputes—costs
  • Trustees’ authority to incur costs
  • Types of litgation in which trustees may be involved
  • A trust dispute
  • A beneficiaries’ dispute
  • A third party dispute (external litigation)
  • Beddoe order
  • Prospective costs order
  • Appeal costs
  • Mediation
  • More...

Trustees involved in litigation will be keen to ensure their costs and any costs awarded against them are met from the trust fund.

Under section 31(1) of the Trustee Act 2000, a trustee is entitled to be reimbursed from the trust fund or may pay out of the trust fund expenses properly incurred when acting on behalf of the trust.

CPR 19.7A states that a claim may be brought by or against trustees, executors or administrators in that capacity without adding as parties the beneficiaries and that any order made is binding on the beneficiaries unless the court orders otherwise.

A trustee sues or is sued in their own name.

Trustees’ authority to incur costs

General rule

The general rule is that a trustee who is party to litigation in their capacity as trustee is entitled to their costs out of the trust fund on the indemnity basis to the extent that those costs cannot be recovered from other parties to the litigation.

Such costs are incurred in the execution of the trust and the trustee’s usual right of indemnity from the trust fund applies provided they are properly incurred.

CPR PD 46, para 1.1 sets out:

‘1.1  A trustee or personal representative is entitled to an indemnity out of the relevant trust fund or estate for costs properly incurred. Whether costs were properly incurred depends on all the circumstances of the case

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