The Parliamentary Under-Secretary of State for Justice (Mr Jonathan Djanogly)
I am pleased to announce the Government’s acceptance of the recommendations made by the Law Commission in its 2006 report “Trustee Exemption Clauses” (Law Com 301).
Briefly, the Law Commission recommended that the Government should promote the adoption by professional and regulatory bodies in the trust industry in England and Wales of a model rule of practice relating to the inclusion in trust documents of clauses limiting the liability of trustees for the consequences of their actions. The recommended model rule provides that a paid trustee or trust draftsman proposing to include such a clause should take reasonable steps to ensure that the person creating the trust is aware of the meaning and effect of the clause before the trust is created.
Model rules to this effect have already been widely adopted by leading regulatory and professional bodies but the Government will be promoting further uptake by writing directly to the relevant regulatory and professional bodies to urge them to adopt the approach recommended by the Law Commission.