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It is a fact of life that beneficiaries and trustees fall out. Often this is due to misunderstandings but occasionally beneficiaries may consider proceedings either to restore a trust fund or obtain compensation on the basis that the trustees have exceeded their authority or failed to exercise their duty of care.

Before taking those proceedings, those instructed to take action should consider a number of points, namely whether:

1. •

   the act complained of is a breach of trust (or breach of fiduciary duty)

2. •

   there is a quantifiable loss and a readily identifiable link from the breach to the loss

3. •

   there is a commercial prospect of recovery from the trustee(s)

4. •

   the claim is outside the limitation period

5. •

   there is an exclusion clause that enables the trustee to escape liability

6. •

   is the trustee likely to be granted relief

7. •

   is the beneficiary guilty of acquiescence

If the first four can be answered positively and the latter three negatively, there may be a justifiable claim.