Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Breach of trust definition

What does Breach of trust mean? In practice, a breach of trust is any act or omission by a trustee that fails to comply with the trust instrument (trust deed) or with duties imposed by statute and the general law, such as misapplying trust property, investing imprudently, failing to take proper advice, or not accounting to beneficiaries. The term is rooted in equity and developed mainly through case law, with statutory frameworks in England and Wales, Scotland, Northern Ireland and Ireland addressing duties, remedies and relief. It is a strict obligation: liability does not depend on dishonesty, though a trustee’s state of mind affects...

Trustee and Director Liability in Trust-based Occupational Pension Schemes: Exoneration, Indemnities, Insurance and Statutory Defences (England and Wales)

Published by a LexisNexis Pensions expert

Practice notes

THIS PRACTICE NOTE APPLIES TO TRUST-BASED OCCUPATIONAL PENSION SCHEMES

Trustees can face personal liability if a breach of trust leads to loss for the pension scheme. This may arise where trustees:

operate beyond the powers set out in the scheme’s trust deed and rules, or
fail to comply with legislation or the law of trusts.

Trustees should ensure that sufficient safeguards exist to protect them against personal liability. With pensions legislation becoming increasingly complex, trustees who do not seek appropriate advice and who lack the necessary knowledge and skills are liable to make errors when administering pension schemes.

directors of a corporate trustee are generally considered to have stronger protection from personal liability than individual trustees. In the absence of dishonesty, the court is unlikely to permit a claim against those directors for a breach of trust by the trustee company, mainly because of the operation of the ‘corporate veil’, discussed further below (see: Protection for directors of trustee companies)...

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Tom McNaughton

Baker McKenzie

Tom is a Partner in the London office's Pensions Practice Group.Tom advises both pension scheme trustees and their sponsoring employers in various industries, with particular experience in relation to industry-wide schemes. He covers a variety of areas including advising in relation to pension scheme mergers, de-risking exercises, corporate transactions and re-organisations, scheme benefit redesigns and restructurings (including closures to accrual and other liability management exercises). He also advises on a number of contentious matters as part of the Pensions Department's pensions disputes practice.Representative clientsSignificant clients which Tom advises include the Trustee of the Merchant Navy Officers Pension Fund, a large industry-wide scheme.Recent maters on which Tom has advised include:Advising the Trustee of the Merchant Navy Officers Pension Fund on various de-risking and insurance transactions as part of its strategic journey planning.Acting in relation to litigation regarding potential changes to the inflation linking of...

Web page updated on 22/05/2026

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