Backwards tracing as an exception and beyond

Abstract After the Privy Council decision Federal Republic of Brazil v Durant International Corp [2015] UKPC 35, the question of how the doctrine of backwards tracing should be understood deserves careful consideration. This article seeks to explain that such a doctrine should be understood and categorised as an exception to the traditional tracing principles. Further, it argues that from a wider perspective, this doctrine has far-reaching implications and reveals a deep conflict in the law of trusts. The development of equitable doctrines sometimes appears to be dependent on policy concerns instead of principles. As such, the articulation of the reasons supporting a particular decision is called for.