This chapter examines the nature of liability for breach of trust. Trusts impose obligations on the trustees, and the trustees can be held liable for breach of trust if their failure to meet the obligations imposed upon them causes a loss. The liability of a trustee for a breach of trust is a personal liability, and any remedy is available only against the trustee as an individual, and not against any specific assets. If the trustee in breach has died, their personal liability continues against their estate. There may be separate remedies in relation to any assets retained by the trustee or in the hands of a third party, and different remedies are also available for breach of fiduciary duty.
Chapter
34. Remedies against the trustee for breach of trust
Chapter
6. Corporate capacity and liability
This chapter focuses on the complex rules regarding who can act on behalf of the company, and how liability can be imposed on the company for the actions of others. A company can enter into a contract by affixing its common seal to the contract, by complying with the rules in ss 44(2)–(8) of the Companies Act 2006 (CA 2006), or by a person acting under the company’s express or implied authority. Section 39 of the CA 2006 provides that a contract cannot be invalidated on the ground that the contract is outside the scope of the company’s capacity. Meanwhile, section 40 of the CA 2006 provides that the power of the directors to bind the company, or authorize others to do so, is free of any limitation under the company’s constitution. The chapter then considers the four methods of liability: personal liability, strict liability, vicarious liability, and liability imposed via attribution.
Chapter
18. Personal Claims and Remedies
This chapter examines the personal liability of a trustee or fiduciary in cases of a breach of trust or fiduciary duty. It analyses the personal remedies that may be available where the defendant has breached the trust or breached fiduciary duties and discusses the advantages and disadvantages in claiming personal or proprietary remedies. The chapter focuses on the nature and function of personal remedies to reconstitute the trust following breach of trust, by means of falsification of the account. It also considers the remedies of surcharging the account, account of profits and equitable compensation. The role of the equitable allowance is also considered.
Chapter
20. Personal Liability of Third Parties
This chapter examines the personal liability of third parties when there is a breach of trust or breach of fiduciary duty. It explains that there are two types of personal liability of third parties. One is receipt-based liability when a third party has received property in which the beneficiary or principal has an equitable proprietary interest and the other is accessorial liability when the third party has encouraged or assisted a breach of trust or fiduciary duty. The elements of different causes of action relevant to receipt-based liability and accessorial liability are examined, notably the action for unconscionable receipt and the action of dishonest assistance. The controversial question of whether liability should be strict or fault-based is considered and, if the latter, the nature of the fault requirement.
Chapter
25. Liability of corporations
This chapter discusses the ways in which organizations and their members might be held liable in criminal law. It covers personal liability of individuals within an organization; vicarious liability; corporate liability: by breaching a statutory duty imposed on the organization, by committing strict liability offences, by being liable for the acts of individuals under the identification doctrine, and the specific statutory liability of organizations for homicide under the Corporate Manslaughter and Corporate Homicide Act 2007; and liability of unincorporated associations.
Chapter
17. Personal Claims and Remedies
Paul S Davies and Graham Virgo
All books in this flagship series contain carefully selected substantial extracts from key cases, legislation, and academic debate, providing able students with a stand-alone resource. This chapter considers the personal liability of trustees for breach of trust and studies proprietary remedies, which involve the claimant’s recovering particular property from the defendant, or obtaining a security interest in the defendant’s property. Proprietary remedies provide the crucial advantage of providing the claimant with priority over other creditors in the event of the defendant’s insolvency. Personal claims, by contrast, do not enjoy such priority over the claims of others. However, where the defendant is solvent and the property in question has fallen in value, a personal remedy for the value of the claimant’s loss or defendant’s gain may be preferable to a proprietary remedy. Personal remedies are also to be preferred when the property in which the claimant had a proprietary interest has been dissipated, because in such circumstances no proprietary remedy will be possible.
Chapter
15. The equitable personal liability of strangers to the trust
Even if a trust beneficiary successfully traces misappropriated trust property, he will only be entitled to a proprietary remedy against a stranger, who retains possession or control of the trust property. The beneficiary’s proprietary claim will fail if the stranger received the trust property, but has not retained it. However, the beneficiary (or the trustee) may be able to bring a claim against the stranger personally if the receipt was wrongful. This chapter analyses the circumstances in which a stranger may be personally liable in equity for analogous wrongs. After providing an overview of who strangers are, it examines a number of policy considerations and practical measures designed to give strangers some degree of protection. The chapter also looks at trusteeship de son tort, personal liability in equity for receipt, and equitable liability for assistance in a breach of trust.
Chapter
13. Breach of trust: the personal liability of trustees
The powers enjoyed by trustees are incidents of their legal ownership of the trust property, whereas their duties are incidents of their personal office. The beneficiary of any trust, even if it is a discretionary trust, has locus standi (which means ‘a place to stand’, used to describe a claimant’s right to be heard in a court of law) to bring an action against trustees for breach of trust. Common law concepts such as causation are increasingly being introduced to limit trustees’ liability for breaches of bare trusts in commercial contexts. This chapter examines the nature and potential extent of trustees’ liability for breach of their duties, along with the remedies that are available against trustees when they breach their trust. It also looks at defences that may be available to trustees in breach and, in the absence of defences, whether trustees may be relieved of personal liability.
Chapter
20. Personal Liability of Third Parties
This chapter examines the personal liability of third parties when there is a breach of trust or breach of fiduciary duty. It explains that there are two types of personal liability of third parties. One is receipt-based liability when a third party has received property in which the beneficiary or principal has an equitable proprietary interest and the other is accessorial liability when the third party has encouraged or assisted a breach of a trust or fiduciary duty. The elements of different causes of action relevant to receipt-based liability and accessorial liability are examined, notably the action for unconscionable receipt and the action of dishonest assistance. The controversial question of whether liability should be strict or fault-based is considered and, if the latter, the nature of the fault requirement.
Chapter
8. Employers’ liability and non-delegable duties
Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams, and exercises help readers engage fully with each subject and check their understanding as they progress. Employment contracts implicitly require an employer to take all reasonable care to ensure the health and safety of their employees. An employee who suffers an injury due to the tort of another employee may make the employer vicariously liable. In addition, the employer has a personal non-delegable duty of care to ensure that their employees are safe in the workplace. This chapter looks at the various sources of employers’ liability for workplace accidents and discusses the distinction between vicarious liability and personal liability. It also examines the non-delegable nature of the employer’s duty and considers developments in employer’s liability for occupational stress.
Chapter
9. Vicarious liability
Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams, and exercises help readers engage fully with each subject and check their understanding as they progress. In general, liability is based on the personal fault of the wrongdoer himself. A person is liable only for their own acts, and a defendant will usually be free of any liability unless they have negligently or intentionally caused the harm or damage to the claimant. However, a person who has no fault or personal blame may also be held liable for the damage caused by the tort of another. This is known as vicarious liability, which is most common in the workplace and imposes liability without the need to prove that the defendant is at fault.
Chapter
18. Personal Claims and Remedies
This chapter examines the personal liability of a trustee or fiduciary in cases of a breach of trust or fiduciary duty. It analyses the personal remedies that may be available where the defendant has breached the trust or breached fiduciary duties and discusses the advantages and disadvantages in claiming personal or proprietary remedies. The chapter focuses on the nature and function of personal remedies to reconstitute the trust following breach of trust, by means of falsification of the account. It also considers the remedies of surcharging the account, account of profits and equitable compensation. The role of the equitable allowance is also considered.
Chapter
8. Corporate and vicarious liability
David Ormerod and Karl Laird
This chapter focuses on the potential criminal liability of organizations, particularly corporations. Corporations have a separate legal identity and are treated in law as having a legal personality distinct from the people who make up the corporation. Therefore, in theory at least, criminal liability may be imposed on the corporation separately from any liability imposed on the individual members. There are currently six ways in which a corporation or its directors may be prosecuted: personal liability of corporate directors, etc; strict liability offences; statutory offences imposing duties on corporations; vicarious liability; the identification doctrine; and statutory liability of corporate officers. The chapter also discusses the limits of corporate liability, the distinction between vicarious liability and personal duty, the application of vicarious liability, the delegation principle and the ‘attributed act’ principle. The chapter examines the failure to prevent offences found in the Bribery Act 2010 and the Criminal Finances Act 2017.
Chapter
13. Breach of trust: the personal liability of trustees
The powers enjoyed by trustees are incidents of their legal ownership of the trust property, whereas their duties are incidents of their personal office. The beneficiary of any trust, even if it is a discretionary trust, has locus standi (which means ‘a place to stand’, used to describe a claimant’s right to be heard in a court of law) to bring an action against trustees for breach of trust. Common law concepts such as causation are increasingly being introduced to limit trustees’ liability for breaches of bare trusts in commercial contexts. This chapter examines the nature and potential extent of trustees’ liability for breach of their duties, along with the remedies that are available against trustees when they breach their trust. It also looks at defences that may be available to trustees in breach and, in the absence of defences, whether trustees may be relieved of personal liability.
Chapter
15. The equitable personal liability of strangers to the trust
Even if a trust beneficiary successfully traces misappropriated trust property, he will only be entitled to a proprietary remedy against a stranger, who retains possession or control of the trust property. The beneficiary’s proprietary claim will fail if the stranger received the trust property, but has not retained it. However, the beneficiary (or the trustee) may be able to bring a claim against the stranger personally if the receipt was wrongful. This chapter analyses the circumstances in which a stranger may be personally liable in equity for analogous wrongs. After providing an overview of who strangers are, it examines a number of policy considerations and practical measures designed to give strangers some degree of protection. The chapter also looks at trusteeship de son tort, personal liability in equity for receipt, and equitable liability for assistance in a breach of trust.
Chapter
8. Employers’ liability and non-delegable duties
Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams, and exercises help readers to engage fully with each subject and check their understanding as they progress. Employment contracts implicitly require an employer to take all reasonable care to ensure the health and safety of his or her employees. An employee who suffers an injury due to the tort of another employee may make the employer vicariously liable. In addition, the employer has a personal non-delegable duty of care to ensure that his employees are safe in the workplace. This chapter looks at the various sources of employers’ liability for workplace accidents and discusses the distinction between vicarious liability and personal liability. It also examines the non-delegable nature of the employer’s duty and considers developments in employer’s liability for occupational stress.
Chapter
9. Vicarious liability
Without assuming prior legal knowledge, books in the Directions series introduce and guide readers through key points of law and legal debate. Questions, diagrams, and exercises help readers to engage fully with each subject and check their understanding as they progress. In general, liability is based on the personal fault of the wrongdoer himself. A person is liable only for his own acts, and a defendant will usually be free of any liability unless he has negligently or intentionally caused the harm or damage to the claimant. However, a person who has no fault or personal blame may also be held liable for the damage caused by the tort of another. This is known as vicarious liability, which is most common in the workplace and imposes liability without the need to prove that the defendant is at fault.
Chapter
17. Corporate rescue and liquidations in outline
Titles in the Core Text series take the reader straight to the heart of the subject, providing focused, concise, and reliable guides for students at all levels. This chapter deals with the regulatory regime governing corporate rescue and liquidations. It first considers two procedures that were introduced by the Insolvency Act 1986 aimed at implementing the objective of corporate rescue: the administration order and the company voluntary arrangement, the former of which has been fundamentally reformed by the Enterprise Act 2002. It then discusses voluntary winding-up by companies, members, and creditors under the 1986 Act, as well as the grounds on which the court may initiate compulsory winding-up. The chapter also examines the consequences of a winding-up petition on dispositions of company property; winding-up in the public interest; the duties and functions of the liquidator; provisions allowing avoidance of transactions entered into prior to liquidation; the personal liability of directors under the Insolvency Act 1986; and distribution of surplus assets following liquidation. Finally, it outlines a number of amendments to the 1986 Act.