Privy Council decision in X Trusts – redefining the role of the protector
Background
On 19 March 2026, the Judicial Committee of the Privy Council (JCPC) delivered its long-awaited judgment regarding the role of a fiduciary protector in the administration of a trust (A and 6 others (Appellants) v C and 13 others (Respondents) [2026] UKPC 11, on appeal from the Court of Appeal of Bermuda).[1] The decision of the JCPC was unanimous, with the judgment being given by Lords Briggs and Richards.
The case concerns a series of discretionary trusts, governed by English law, the law of Bermuda, and one trust governed by Jersey law. Reporting of the case has been restricted by a privacy order and it is generally referred to as the X Trusts case.
Although not common in English law trusts, offshore trusts often include provisions for a protector; typically, a settlor may wish to appoint a trusted advisor or someone with knowledge of the settlor’s family to monitor the trustee’s actions and to serve as a communications bridge between the family and the offshore trustee. The settlor can give a protector any powers they choose, but typically include the power of veto over the trustee’s more important decisions, such as the addition or removal of beneficiaries, or the appointment of trust assets.
The issue
In 2017, the trustees of the X Trusts proposed restructuring of the trusts by appointing trust assets between family branches. The scheme required the written approval of the protectors of the trusts; after consultation, the protectors determined that they were unlikely to approve the proposals.
The trusts conferred two main powers on the protectors:
- The power to approve or refuse any appointment of capital to the beneficiaries; and
- The power to approve or disapprove any dealing by the trustees of certain securities and shares.
The question of how a protector should approach the question of whether to approve or veto a trustee proposal has been the subject of much academic debate, between whether the protector’s role is considered as “narrow” or “wide”:
- Narrow role: the protector’s role is limited to reviewing the legality of the trustee’s proposal.
- Wider role: the protector is empowered to use independent discretion in deciding whether or not to consent, by reference to their own view of the merits of the trustee’s proposal.
Both the Bermuda Supreme Court and Court of Appeal unanimously concluded that the narrow role applied to the X Trusts; one of the family branches appealed to the JCPC.
JCPC decision
The JCPC examined the law on the construction of trust instruments required to interpret the role given to a protector in any given case: any restriction must be based on a consideration of the express terms of the trust set in their relevant context.
As to any terms to be implied in the trust instrument, where a written instrument does not expressly provide for what is to happen when some event occurs, the most usual inference is that nothing is to happen. The trust instruments of the X Trusts provided for the protectors to exercise precisely defined powers but remained silent as to how those powers were to be exercised.
The JCPC found that the relevant settlements did not have any express language imposing constraints on the protectors of the X Trusts in the exercise of the power of veto over the trustees’ proposals for appointment or dealing with certain shares. The JCPC noted the following:
- Unusually, the protectors had been introduced by the trustees, rather than the settlors, although this was immaterial to the issue of construction.
- One important factor was that the powers conferred on the protectors were to be exercised as fiduciaries. The powers came with all the powers that the law imposed on someone who had assumed a fiduciary role. It followed that the protectors were duty-bound not to permit a conflict of interest and must only exercise the powers for a proper purpose. These duties were fully consistent with the wider role.
- The protectors were not constrained by any general duty to act in the interests of the beneficiaries as a whole from considering proposed appointments in favour of particular beneficiaries.
- As a matter of construction, the constraints identified did not confine the protectors to the narrow role.
In the JCPC’s view, while there were no terms in the trust instruments that supported the narrow role, there were various factors that supported an argument that the wider role was intended:
- The trust deeds provided for the release or waiver of the protector’s powers; if it was the intention that the protectors should have a fiduciary duty to check the legality of the trustee’s proposals under the narrow role, it was difficult to understand why they would be given the power to abandon their function permanently.
- A provision enabling the trustees to proceed with a proposal where the unanimous consent of the protectors had not been obtained, (provided that the trustees take the protectors’ views into account before taking a final decision) indicated that a wider role was intended.
- If a narrow role was intended, it might be expected that the terms of the trust instrument would restrict the eligibility to be appointed as a trust protector to those qualified to assess the legality of the trustees’ proposed action.
- It was difficult to understand why a settlor would think it necessary to appoint a protector to ensure legality of conduct by a professional corporate trustee which would be expected to take and follow its own legal advice.
- The prospect of any potential deadlock is not a reason to reject the wider role.
On balance, the JCPC took the view that the factors they considered came down overwhelmingly in favour of the wider role for the protectors of the X Trusts: there was no peg on which to hang the narrow role.
It followed that the settlors had introduced carefully drafted protector provisions, which did not set out expressly how the protectors were to decide or disapprove the trustees’ proposals submitted to them for approval. Any gap in the protectors’ role must be seen as a deliberate gap which could not be filled by an implied term.
Key takeaway for practitioners
The JCPC has clearly rejected the mere “watchdog” role for protectors by moving away from treating protectors as passive overseers and recognising that they may be powerful decision makers within the trust structure.
In relation to existing trusts, practitioners should take care to review the scope of protector powers in the trust instruments to ensure their powers are aligned with their intended role.
In the absence of express wording in a particular trust deed as to how a fiduciary protector should carry out their duties, the wider role will likely prevail, and the protector is empowered to use independent discretion by reference to their own view of the merits of the trustee’s proposal.
Where protector consent is engaged Trustees should not expect consent to follow simply because their proposal is considered to be rational. Greater engagement between trustees and protectors is expected, with protectors participating in the substantive decision-making process from an early stage.
If a protector’s refusal to consent is irrational, the Court retains the power to intervene and override the veto. However, where a protector has properly exercised their “wider role” function, the court can direct further consultation or break the deadlock.
In relation to new trust deeds, attention to detail in the drafting of consent powers is crucial. Practitioners should consider whether it is appropriate to expressly confer narrower protector powers to avoid any doubt about the extent of protector powers, and the wider role being engaged.
[1] The trustees issued a summons before the Supreme Court of Bermuda for a blessing of a proposed appointment under Public Trustee v Cooper in June 2020; the application was opposed by a branch of the family.
