Why are trust claims more successful than other forms of litigation?

We advise our clients daily that litigation is risky. By its nature a dispute involves a divergence of views, and either one of these could be borne out in the course of a contested hearing. 

Analysis of the success rate of claims brought in the courts of England and Wales over the past 10 years bear out this theory. Only 38.2% of claims have succeeded and 16.9% succeeded only in part.

This statistic supports the general proposition that if you bring litigation to resolve a dispute, you are more likely than not to be unsuccessful on all or part of your claim. Likewise, if you defend a claim to court, you are more likely than not to lose on at least one part – a salutary reason to try ADR if ever there was one.

On closer analysis of trust claims brought in the Chancery Division, however, that success rate rises to a punchy 57.6%, climbing to 70.7% succeeding in whole or in part.

These are remarkable odds when compared with all other courts over the same period, averaging 20.6% more likely to succeed than a claim brought in any other court.

So, what accounts for this? ‘Chancery counsel are particularly skilled!’ I hear them cry. Perhaps. More likely the answer lies firstly with the supervisory role of the Chancery court.

Unlike a binary, adversarial dispute, in claims brought under the supervisory jurisdiction the court is able to consider a trust holistically, protecting the interests of both trustees and beneficiaries.

For trusts to exist trustees must be willing to take on a delicate fiduciary role, personal liability and wide ranging responsibility.

One facet of the court’s supervisory function is to protect trustees in taking hard decisions within the remit of their power. Without this support trustees would be readily deterred, reluctant to act and ultimately scarce. The governance and sustainability of private trusts, charities and public bodies would be significantly undermined.

In practice this involves a high number of applications by trustees, primarily under part 64 and 57 of the Civil Procedure Rules. These claims can involve seeking directions, remedies or blessings from the court.

This subject matter highlights two other reasons why the statistics read so favourably. Seeking directions and protection is generally a prudent step, and trustees taking such prudent steps would be ill‑advised to ask the court for that which is far beyond reasonable. This self-selecting type of claim tends naturally to those with a higher chance of success.

Finally, trustees mainly litigate with trust funds for the benefit of the trust. Trustees are not wagering for personal gain but acting on behalf of others for their ultimate benefit. In litigating they risk personal costs exposure in the event they fail or engage outside a mandated course of action. Again this bakes in a natural caution and tends towards claims with good prospects of success.

That said, the lines are often blurred, and make no mistake, the Chancery trust courts are ripe with exciting, adversarial and complex litigation, with winners and losers alike.

This article was originally published in the Thought Leaders 4 HNW Litigation & Advisory Magazine.