The High Court (Blackmore J) has held that trustees defending a hostile action brought by a beneficiary did not have to remain neutral or impartial as between the different beneficiaries. The judge found that there was nothing improper in the trustees applying to strike out the beneficiary's claim rather than applying to the court for directions, or in relying on a beneficiary indemnity for their costs rather than applying to the court for a Beddoes order. The trustees' duty of neutrality as between the beneficiaries for whose benefit they held the trust fund did not prevent them from defending their position when their own conduct was called into question. Further, in this case, it was not clear that the claim was being defended by the right persons, absent some kind of representation order enabling one of the other beneficiaries to defend the claim. Therefore, the trustees might have been open to criticism if, believing the claim to be without merit, they had done nothing.

This decision will provide some comfort to trustees faced with a hostile action from beneficiaries. It also shows that trustees should consider, at a preliminary stage of hostile litigation, whether they could apply to have the application struck out if it is unmeritorious or opportunistic.

Case: Fielden v Christie-Miller and others [2015] EWHC 2940 (Ch) (Bailii).