Duties of Trustees - Investment - Statutory Duty of Care
3 important questions on Duties of Trustees - Investment - Statutory Duty of Care
When reviewing investments, what standard of care is expected from trustees? What is the main authority?
Trustees must exercise the same standard of care as would a reasonable businessman or woman when investing for someone (Learoyd v Whitely).
Explain why the trustees did not breach their duty in Nestle v National Westminster Bank?
The trustee (the bank) was conservative in their investment decisions which meant the value of the fund increased modestly. It was held the trustee was not in breach of its duty as the beneficiary can only recover compensation for loss if it can be proven that the trust fund was less than what a reasonable man would have made in the same circumstances.
Will a trustee be held liable if they make an investment decision that a reasonable trustee would not make? What is the main authority?
In Wight v Olswang a trustee is not liable for an investment decision unless it is one that a reasonable trustee with similar knowledge and skill would not make.
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