Commentary on Clauses Part I: The Duty of Care
Sections 1 and 2 form Part I of the Act. The sections create a new uniform statutory duty of care applicable to trustees when carrying out their functions under the Act or equivalent functions derived from the trust instrument or other sources. The new duty will bring certainty and consistency to the standard of competence and behaviour expected of trustees across a range of situations. It will be a safeguard for beneficiaries and so balance the wider powers given to trustees elsewhere in the Act. The duty will apply in addition to the existing fundamental duties of trustees (for example, to act in the best interests of the beneficiaries and to comply with the terms of the trust) but it will exclude any common law duty of care which might otherwise have applied. The duty is a default provision in that it may be excluded or modified by the terms of the trust. In other words, in line with the basic approach of the Act, it will not apply where the person setting up the trust (the settlor) indicates that it is not wanted.