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You are here: Home » Downloads » Making sense of the Trustee Act 2000

Making sense of the Trustee Act 2000


While it might seem pretty obvious that trustees must look after the best interests of those who benefit from the trust, their obligation to do so is so important that the Trustee Act 2000 makes it a statutory duty of care.

The Act, which came into force in 2001 and applies in England and Wales, was designed to modernise the way that trustees oversee the management of investments held in trust and to give them a more general power of investment.

In effect, this means that trustees can make use of a wider range of investments than they were able to before the Act, including collective investments such as unit trust and investment bonds.

As well as the duty of care requiring the trustee to exercise “such care and skill as is reasonable in the circumstances” in everything they do in relation to the trust, there are specific responsibilities regarding what is known as the standard investment criteria.

This means that the trustee must make sure that any investment proposed or retained by the trust is suitable for it and must also consider the need to diversify investments, where appropriate.

Keith Lyons, a director of LRH Wealth Management Limited, says: “Many trustees are professionals, who are used to dealing with trust matters but for those who are not au fait with the issues and for non-professional trustees, meeting the obligations of the Act may seem daunting.

“In these circumstances, it’s wise to seek the advice of professionals in the field to ensure compliance with the Trustee Act 2000 and peace of mind for the trustee.”

LRH Wealth Management have a Trust Compliance flowchart available to assist trustees in identifying their resposibilities. Please complete the below form to download a copy of the checklist or for more information, please contact us.

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Latest News

Insurance industry to pay out on COVID-19 business interruption claims

January 18th, 2021

More than 370,000 small businesses in England and Wales could be due a payout on their business interruption insurance after the Supreme Court ruled in favour of payments being made on previously refused claims and policies.

A number of insurers have lost an appeal against an earlier ruling, brought in a test case by the Financial Conduct Authority (FCA), which required them to payout on existing business interruption insurance policies as a result of the pandemic.

In the first lockdown of spring 2020, many small businesses made claims through their business interruption insurance schemes for loss of earnings when they had to close as a result of the Government’s restrictions.

However, they were soon told by their insurers that they were not eligible for a payout because only specialist policies had cover for such unprecedented events.

Following an outcry from the small business community, many of whom had paid thousands of pounds for insurance coverage, the FCA launched a test case which looked at a selection of policy wordings to establish the parameters for what would be considered a valid claim.

Last year an initial case at the High Court found that some insurers should have paid out for losses caused by the lockdown. Judges ruled that disease clauses found in many business interruption insurance policies should have meant they were covered and been compensated for the loss of income due to the Coronavirus restrictions.

An appeal was then brought and the test case was fast-tracked to the Supreme Court – the highest court in England and Wales – who conducted a four-day hearing last year, before delivering a final ruling.

This latest ruling provides authoritative guidance for these policies, and similar ones that were not part of the case, which will be used by the FCA, the insurance sector, and the Financial Ombudsman to assess claims and make judgements.

This impacts on all eligible policies held at the time of the first lockdown, whether an initial claim was made and rejected or not.

The ruling covers a wide range of matters including disease clauses, whether businesses were denied access to the properties they owned by restrictions and the timing of lost earnings.

Giving the court’s ruling Lord Hamblen said the court accepted the arguments from representatives of policyholders and dismissed the appeals from insurers finding in policyholders’ favour.

Although the initial case only tested a small number of policies from eight different insurers, the FCA has said that the findings could affect up to 700 different policies held by various insurers and lead to payments for more than 370,000 small businesses that hold policies.

Insurers, such as Hiscox, Arch, Argenta, MS Amlin, QBE and RSA, that were involved in the case will now process claims. However, as many as 60 insurers who sold similar products may now also pay out on eligible policies.

Huw Evans, Director General of the Association of British Insurers, has said that all valid claims will be settled and that the process of settling some claims was already underway.

Most eligible policyholders should be contacted by their insurer following the ruling, but businesses are being encouraged to check whether they can make a claim.

As for new claims relating to the latest lockdowns, the insurance industry has said that most policies for new and renewing customers have already been amended and that losses from the latest lockdown measures would be clearly stated as part of the cover.

If you require assistance with any issues related to the COVID-19 pandemic, please contact us.

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