preface
Trusts originated in England and came into existence and development with equity. From the perspective of the usufruct system, which manifested itself in the early trust law, the usufruct system was mainly created to circumvent feudal obligations, in which the settlor handed over the property to the trustee and managed the property for the benefit of the beneficiaries.
There are three parties in a trust relationship: the settlor, the trustee and the beneficiaries, and the trustee occupies a central position in the trust relationship. In the 19th and 20th centuries, during the modernization of trust law, trustees underwent significant changes, and preventing trustees from benefiting themselves when administering trust property became one of the important contents of trust law.
Birth of the Public Trustee Act of 1906
Various solutions have been proposed to the plight of traditional trustees. For example, first, amend the law to encourage responsible people to act as trustees. The judicial authorities have carried out corresponding work, stipulating that if the trustee does not breach the fiduciary duty due to fraud, the Limitation Law may be applied; If the trustee has fulfilled his duty of good faith in the performance of the trust affairs and there are reasonable grounds for it, the court cannot find him in breach of the fiduciary duty.
Second, some argue that the law should provide that all trustees have the right to remuneration. Some people also propose that the deposited trustees or executors should transfer their trust business to professional trustees, who are entitled to the right to demand remuneration.
Thirdly, there has been a proposal to set up a well-managed and disciplined trust company, which has the right to apply for probate permission separately and to claim fees for the services it provides, whether permitted by the trust certificate or in any other case.
In the end, Sir Howard Vincent's proposal to establish a public or official trustee was adopted after several setbacks. However, there were differences and divergent opinions among decision-makers at the time, mainly between Sir Hasschan and Sir Halsbury.
Sir Haschel did not deliberately exclude public trustees during his tenure as Chancellor of the Liberal Party from 1886 and 1892 to 1895, but he preferred the establishment of commercial trusts. As a Tory, Sir Halsbury took the opposite position of Sir Haschanel during his tenure as Lord Chancellor, supporting the establishment of a public trustee.
Because of the divisions among those in power, especially when so many lawyers are on the side of the change, any reform proposal is very likely to die.
Sir Vincent had to change tack, and in 1895 he applied to the Commission to investigate the administration of trusts, through which he hoped to seek persuasive facts and grounds for the relevant legislation. Since the public trustee is an official institution, at first some people proposed a similar concept of a turn with "bureaucratic" and "red tape" tendencies (referring to the judicial trustee), but among some of the heads of the committee, especially Chairman R. T. Reid, the establishment of a public trustee was preferred.
However, the Metropolitan Police provided substantial evidence that the establishment of a trustee with a judicial character was more persuasive, and the Commission retreated in favour of a "judicial trustee".
The Judicial Trustees Act 1896 was enacted, which provided that the judicial trustee was a way between an ordinary trustee and a court-ordered trustee, being a court-appointed trustee. He may perform affairs as a separate trustee or in conjunction with other trustees, replacing the existing trustee if there is a suitable reason.
The judicial trustee has the status of a public official of the court and shall in all cases be subject to the management and supervision of the court as an official of the court, and the court may give any instructions on the management of the trust and the administration of the judicial trustee, and the judicial trustee may seek instructions from the court when he encounters confusion or difficulties in matters concerning the administration of the trust.
At the same time, as a person appointed by the court, the judicial trustee has the right to claim remuneration. However, practice has proved that when the judicial trustee executes the management of the trust, it is very easy to receive instructions from the court at any time, and the parties are unwilling to place the trust under the overall management of the court, and there is a contradiction between the will of the parties and the instructions of the court. In the end, the judicial trustee failed completely.
Reasons for the decline of the public trustee system: differences in the process of legal borrowing
The UK's public trustee system was modeled on New Zealand's public trustee system. The reason for the establishment of a public trustee in the UK is the lack of private trustees who voluntarily act as trustees (especially in relation to small estates); The increase in the volume of trust business makes it impossible to quickly and efficiently find a replacement for the trustee; and people's desire for high-quality trust services. Secondly, the trust losses increased due to the incompetence and dishonesty of the trustee. But the system, which worked quite well in New Zealand, failed in the UK.
The biggest difference between UK public trustees and New Zealand public trustees is in investment rights. In the United Kingdom, under the rules of equity, trustees cannot take an interest from the trust. The public trustee also cannot profit from the management of the trust, and relying solely on business fees cannot bear the expenses of daily administrative affairs.
The Public Trustee's Office borrows from the reserve fund in New Zealand's public trustee system to set up a "unified fund" to cover daily management costs, such as office rental fees, equipment costs, etc.; Another function of the Unified Fund is to cover or compensate for losses incurred in the course of trust management.
However, the UK's Unified Fund was not as fortunate as New Zealand's, and not only was it required to provide financial protection, but it was itself limited in its use due to the curtailment of the public trustee's office.
The rights of the UK Public Trustee are also less extensive than the New Zealand Public Trustee. Public trustees in the UK cannot undertake much ancillary work in resolving conflicts of law, such as the preparation of testamentary trusts. The benefits of ancillary work being introduced to a public trustee are one of the ways the office can survive in the long run.
The assistance of the UK Public Trustee in the management of trust matters relating to the elderly and infirm, infants, the mentally ill, etc. is also different from the New Zealand Public Trustee, and the UK Public Trustee will only be effective if the person is confirmed that the person is eligible.
The twists and turns of the development of public trustees in the UK
From the perspective of the evolution of the public trustee, it was established because of the limitations of the traditional trustee. The rapid economic development and the industrial revolution caused great changes in the entire British society, which meant not only economic take-off, but also the overall change of society. Trusts have shifted from the early real estate business to the movable property business, and traditional trustees have been unable to meet new business needs.
Trusts in the new era need not only trustees with extensive knowledge and a sense of responsibility, but also trustees with professional knowledge, which makes traditional trustees unable to meet the needs of the development of the times; The increase in trust business, the overwhelm of traditional trustees, and the frequent occurrence of trustee fraud cases have led the UK to borrow New Zealand's public trustee system.
However, the development of public trustees in the UK has not been smooth. The judicial trustee is implemented first, and it is not until the judicial trustee can no longer solve the fundamental problem, and the public trustee officially takes the stage. As a special trustee, the public trustee is limited in business, and after borrowing from the New Zealand public trustee system, British legislation and judicial support have led to the decline and disappearance of the times due to mergers with other departments.
The conflict between the public trustee system and the English legal tradition
The common law system in which the United Kingdom is located has a profound socio-cultural background. As we all know, English law does not strictly divide public law and private law, because the common law system is less influenced by Roman law, and does not divide the legal department into public law and private law according to whether the legal norms protect public or private interests; There is no distinction between litigation against people and lawsuits in rem according to the law, but according to historical tradition, the law is divided into property law, contract law, tort law and other departments.
It is also this feature of the English legal tradition that in the early and middle development of English trust law, the distinction between private trustees and corporate trustees is not strictly reflected, and more in the form of private trustees, and legal trustees are not valued. In the 13th century, English jurists found the distinction between claims in rem and suit against people in representative works of jurisprudence, while they tried to classify their rules of procedure into categories of universal applicability.
A feature of the English legal tradition is what makes the trust system born in that country. Such a system cannot be born in a country that strictly distinguishes between public and private law, between human rights and hereditary rights. Because the trust system may have both public law and private law elements, the British regard trust as a kind of property in actual operation and thinking habits.
epilogue
From the initial establishment of the British public trustee to the decline, nearly 80 years of development, the transformation of the UK from private trust to corporate trust has gone through twists and turns.
The lack of real development of public trustees in the UK is related to the slow development of the concept and system of legal persons in the UK. There is no strict distinction between public and private law in the English legal tradition, and consequently, there is no strict distinction between private trustees and corporate trustees in the development of trust trustees. It is precisely for this reason that in the actual practice and thinking habits of the United Kingdom, trust is regarded as a kind of property law. Moreover, in the development of British trusts, from the beginning of the establishment of the system to the development process, private trustees have always been the most important group of trustees.