Introduction
The Privy Council has, in A and 6 others v C and 13 others [2026] UKPC 11, delivered a landmark judgment clarifying the default role of protectors in offshore trusts. The decision provides authoritative guidance on whether protectors are confined to reviewing the legality of trustee decisions (the "Narrow Role") or may exercise an independent judgment on the merits of those decisions (the "Wider Role"). The Justices (Lord Reed, Lord Briggs, Lord Stephens, Lady Rose and Lord Richards) unanimously held that the protectors of the X Trusts possessed the Wider Role, overturning the decisions of the Bermuda courts and offering important direction for trustees, protectors, beneficiaries, and legal professionals.
Background
Offshore trust deeds frequently include a "protector" — an individual or corporate fiduciary appointed to oversee or approve certain trustee decisions. Protectors often serve as a bridge between the family/beneficiaries and the offshore trustees. They are typically granted veto powers over significant trustee actions.
However, most trust deeds do not specify how protectors should exercise these powers. This silence has given rise to two competing interpretations:
- Narrow Role: the protector's function is limited to reviewing the legality of trustee decisions.
- Wider Role: the protector may assess the merits of trustee decisions and veto them even if the trustees' proposal is lawful and within their discretion.
The case concerned a group of discretionary trusts governed by English, Bermuda, and Jersey law. The protectors held veto powers over appointments of capital and dealings with "Specified Securities", including shares in OpCo. When trustees proposed a division of trust assets between two family branches, the protectors indicated they were unlikely to approve the plan, assuming they held the Wider Role.
The A branch argued for the Narrow Role; the B branch for the Wider Role. Both the Bermuda Supreme Court and Court of Appeal held that the protectors were confined to the Narrow Role. The B branch appealed to the Privy Council.
Judgment
The Privy Council unanimously allowed the appeal. It held that the X Trusts conferred the Wider Role on the protectors. The Board emphasised that, where a trust instrument grants a veto power without specifying how it must be exercised, the starting point is that the recipient of the power is under no constraint as to how that power of veto is exercised, "save perhaps an obligation of good faith".
The Board rejected the binary framing of Narrow vs Wider Role. Instead, it focused on the actual constraints (express or implied) imposed by the trust deeds and by general fiduciary law. It concluded that:
- the trust deeds imposed no express constraints limiting protectors to legality review;
- fiduciary duties, such as acting for proper purposes, avoiding conflicts, and not profiting, do not confine protectors to the Narrow Role; and
- contextual indicators within the deeds strongly supported a merits based evaluative function.
The Board also rejected any attempt to imply a term limiting protectors to the Narrow Role, noting that an apparent gap may be "deliberately left" by the settlor and that the implied term tests were not satisfied.
Key takeaways
Silence in the trust deed does not imply a Narrow Role
The absence of express guidance on how protectors should exercise their powers does not justify implying a constraint. The Board reiterated the long standing principle that when a written instrument is silent, "the most usual inference … is that nothing is to happen" (Lord Hoffmann in Attorney General of Belize v Belize Telecom Ltd [2009] UKPC 10, [2009] 1 WLR 1988). Any gap must be treated as deliberate unless necessity dictates otherwise.
Fiduciary duties are compatible with the Wider Role
Protectors of the X Trusts were expressly required to act as fiduciaries. However, fiduciary obligations (for example, good faith, proper purpose, avoidance of conflicts) do not limit protectors to legality review. They are fully consistent with a merits based assessment.
Contextual features of the trust deeds supported the Wider Role
Several provisions pointed strongly toward a broader evaluative function:
- protectors could waive or release their powers, which was found to be difficult to reconcile with a supposed duty to police legality;
- trustees could proceed without unanimous protector consent in certain circumstances, provided they considered the protectors' views; and
- only a limited range of trustee decisions required protector approval, suggesting a targeted supervisory role rather than a narrow legal check.
Broader contextual factors
The Board identified a couple of wider contextual indicators that made the Narrow Role implausible:
- there were no restrictions on who could serve as protector (for example, lawyers with specialist experience in trust matters). The absence of such restrictions implied that the settlor did not intend a purely legal compliance role; and
- there was no practical need for a legality-policing protector. Professional trustees are already expected to act lawfully, take advice, and comply with it. A protector whose sole task is to confirm legality would add little value.
Together, these contextual factors reinforced the conclusion that the settlor intended protectors to exercise a Wider Role, not a limited legality review.
Practical implications for trustees, protectors, and legal professionals
- Trustees should expect protectors to exercise independent judgment on the merits of decisions requiring consent.
- Protectors must be prepared to justify their decisions within fiduciary parameters, but are not confined to legality review.
- Legal professionals should expressly define the intended scope of protector powers to avoid ambiguity and litigation.
In this decision, which will be binding across most of the key offshore jurisdictions, it is clear that the role of protector can no longer be described as a peripheral "watchdog" – the Privy Council's decision confirms that they have truly been let off the leash!
