Knowledge

Beddoe applications are a familiar part of Guernsey trust litigation, but the amendments to the Trusts (Guernsey) Law, 2007 (the "Trusts Law") approved by the States of Deliberation on 20 May 2026 make them worth revisiting. It should be noted that the proposed amendments to the Trusts Law were set out in a policy letter dated 20 March 2026, which was drafted by the Committee for Economic Development following consultation with local practitioners and taking account of developments in other jurisdictions.  While the proposed amendments have been debated and approved, the legislation has not yet been drafted and so we await the exact wording of the amendments.

A Beddoe application is an application to the Royal Court for directions as to whether a trustee should bring, continue or defend litigation on behalf of a trust. If granted, the trustee will ordinarily be entitled to an indemnity from the trust fund for its legal costs and any adverse costs exposure, even if the litigation is unsuccessful.

The reforms will not alter the Royal Court's core jurisdiction to give Beddoe directions under sections 68 and 69 of the Trusts Law, but they may change the surrounding framework in ways that will affect how trustees prepare, evidence and pursue applications for directions and costs protection, particularly where fiduciary power holders and privacy issues are involved.

The basic structure of a Beddoe application will remain unchanged following the reforms, but what will change is the context in which a trustee will come to court.

Fiduciary status of power holders (sections 15 and 32 of the Trusts Law)

The first important development is the proposed reversal of the presumption in section 15(2)(b) of the Trusts Law. Powers reserved or granted to a settlor or another person will now be presumed to be fiduciary unless the trust instrument provides otherwise and section 32 of the Trusts Law is to be aligned with that approach in relation to powers requiring consultation or consent.

In relation to a Beddoe application, this matters because litigation decisions in modern trust structures are often not taken by trustees without consulting with related "trust officials". Protectors, reserved power holders and other office holders may all have a role or input in whether proceedings are brought, defended or settled.  The court is therefore likely to expect clearer evidence as to who held the relevant power, whether it was fiduciary in character and how that power was, in fact, exercised.

In light of the reforms, the court can require office holders to approach litigation decisions consistently with fiduciary standards of good faith, proper purpose and rational decision-making, reducing the scope for personal or non-fiduciary objections to derail a properly prepared Beddoe application.

The reversal of the presumption in section 15(2)(b) of the Trusts Law will not have retrospective effect and so will only apply to trusts established post-amendment. Until the draft legislation and any consequential Rules of Court are published, the precise operative effect of the reforms should be treated with caution.

Confidentiality of deliberations (section 38 of the Trusts Law)

The second significant reform is the extension of section 38 of the Trusts Law. At present, section 38 protects trustees from any obligation to disclose documents revealing their deliberations, the reasons for their decisions, the material on which those decisions were based, and letters of wishes. The reforms extend that protection to other fiduciary office holders including protectors and enforcers. For Beddoe applications, that should make it easier for trustees and fiduciary power holders to deliberate candidly before seeking directions.  Trustees may wish to sense check with others connected with the administration of a trust as to whether a Beddoe application is even necessary. Safe, confidential debates allow them to align or resolve disputes internally before spending trust funds on court applications.

In circumstances where section 38 of the Trusts Law applied strictly to trustees alone, if a trustee shared candid litigation risk assessments or sensitive internal deliberations with another office holder, such as a protector, while preparing a Beddoe application, a hostile beneficiary could seek disclosure from that office holder to bypass the trustee's protection. The extension of section 38 protections to other trust officials should reduce that risk and support a fuller and more candid exchange of information.

A trustee asking the court to bless litigation will still need to explain, in coherent terms, what was considered, what advice was taken, what alternatives were available and why the proposed course of action is said to be in the interests of the trust.

Court powers and dispute resolution (section 57 of the Trusts Law and related provisions)

The third area of relevance is the expansion of the court's powers elsewhere in the Trusts Law, particularly in relation to variation and dispute resolution. The reforms widen the court's ability to approve variations and other transactions, and also expand the scope for arbitration of internal trust disputes. This does not displace Beddoe relief, but it does mean that trustees may have to think more broadly before embarking on hostile or expensive litigation. In some cases, the better approach might be to consider arbitration or ask the court for a more tailored form of supervisory order rather than seeking a blessing to litigate.

Privacy of trust proceedings

The reforms address privacy more directly and this is likely to be the most practically significant development for contentious trust work. Currently, there is no provision in the Trusts Law that deals expressly with the circumstances in which matters involving trusts will be heard in private. The policy letter recommends that the Trusts Law is amended so that the court is permitted to make provision by Rules of Court for trust administration proceedings to be heard in private. This will remove reliance on common law exceptions to open justice, although the scope and operation of any privacy regime will depend on the final statutory wording and Rules of Court.

This is significant for Beddoe applications, which usually involve sensitive information about litigation strategy, costs exposure and internal governance. The reforms should at least make it easier and cheaper to argue that a Beddoe application, as part of the internal administration of the trust, should be heard in private.

Practical implications for trustees

For trustees and advisers, the reforms point to the following practical takeaways for future Beddoe applications:

• identify the proposed litigation decision early and prepare a clear litigation plan, including merits, costs and funding with considered alternatives and strategy;
• be ready to show how protectors, reserved power holders and others whose consent, consultation or fiduciary role may be relevant were involved in the decision to litigate or settle; and
• as part of that process, maintain a record of advice, considered alternatives and decision making, while using the extended section 38 protection to preserve confidential deliberations.

Conclusion

Together, the reforms may better align the court's supervisory jurisdiction with the commercial realities of dealing with a trust. Guernsey trustees can continue to seek Beddoe relief with the benefit of more certainty over protected deliberations and a more principled route to privacy, while leaving the court's supervisory discretion firmly intact.