Proportionate Liability for Breach of Trust under the Civil Liability Act: An Opiate on the Conscience of Trustees

This article considers the impact that part 4 of the Civil Liability Act 2002 (NSW) may have on the internal workings of the office of trusteeship. It is argued that where more than one trustee has been involved in an imprudent breach of trust that has caused loss, the claims are likely to be apportionable under part 4, with the effect that the trustees are no longer jointly and severally liable for the loss, each being liable severally only, and each liable only for the proportion of the loss for which they are responsible. It is suggested that this conclusion indicates the potential for the statutory regime to operate as something of an opiate on the conscience of trustees, undermining the incentive structures that equitable doctrine traditionally deployed to keep trustees up to their duty.