Protector, interrupted

The role of a protector requires careful consideration at the outset of the drafting process, to define the role they are intended to play and to manage settlor expectations as to what can be achieved.

A protector may have a fiduciary role, or they may have personal powers depending on the way in which the trust instrument is drafted and the governing law of both the trust and forum of administration. Historically, a protector’s role was often a personal one without fiduciary powers with a view to enabling the settlor to retain control over the trust (ie, by effectively enabling the protector to act as their “eyes and ears”).  

With increased clarity around the fiduciary nature of protector’s powers, the recent decision In the matter of the Billevese Trust [2025] GRC060 is relevant in re-examining the test for the removal of protectors and fiduciaries. It also shines a light on the issues that can arise where more complex governance structures are adopted.

Background

In Billevese, there was a Board of Protectors for the trust, divided into Class A Protectors and Class B Protectors. The powers of all protectors (including both Class A and Class B) were expressly stated be “fiduciary in nature”. All members of the Board had equal voting rights.

The distinction between the Class A and Class B wasn’t one of their powers, but rather their method of appointment and removal. Importantly, the life tenant and sole beneficiary of the trust, Cynthia Bernheim, retained the power to remove Class B Protectors, but not Class A. 

As such, when Cynthia believed that the Class A Protectors had acted in breach of their fiduciary powers, she was required to advance a court application to seek their removal. This was only possible because of their fiduciary standing.

The complexity of protectorship structures

The nature of the distinction between the Class A Protectors and the Class B Protectors is indicative of the growing trend of strong governance and complex protectorship structures within offshore trusts. It’s common to have multiple classes of protector constituting a protector committee with subtly different powers and/or methods of appointment and removal. This is often a way to balance either:

• Family influence with professionalisation
• The involvement and influence of different generations

In this case, the Class A Protectors were originally chosen due to extensive experience in investment and asset management, with the Class B Protectors seemingly having a broader remit.

Where the powers of the protectors remain the same (notwithstanding the distinction between Class A and Class B Protectors), and they’re all fiduciary in nature, it’s vital that all protectors ensure they act in accordance with their duties.  

In this instance, it was alleged the Class A Protectors had acted in breach of their fiduciary duties by:

• Abusing their position by protecting investment management companies in which they had a personal interest, despite having been appointed for their financial expertise and subsequently instructing the trustee to engage companies with which they were affiliated.
• Misunderstanding their role as protectors by insisting upon the attendance of intermediaries and legal advisors for the purpose of meetings with the Class B Protectors and the trustee.
• Their relationship with the Class B Protectors had broken down, meaning the Board of Protectors was unable to take decisions unanimously as required.

The test for removal of a protector

The guiding principles for the Court in deciding whether to remove a fiduciary (whether a protector or a trustee) are:

• The welfare of the beneficiaries
• The competent administration of the trust  

As established above, it was clear from the trust instrument that the Class A Protectors were fiduciaries.

It isn’t necessary for there to be evidence of positive misconduct for a fiduciary to be removed. It’s instead for a potential applicant to make a good arguable case that the continuance of the relevant fiduciaries in their role will prevent the trust from being properly executed.

The court’s decision

The court ordered that the Class A Protectors be replaced by reason of the following conduct:

• They had personal interests in the investment management companies and failed to recognise and manage the conflict. This was demonstrated by their refusal to attend meetings with the trustee due to the potential removal of all assets from the investment management companies.
• They insisted upon an intermediary liaising with the trustee which had resulted in further delays. That intermediary had a conflict of interest given his role in the investment management companies, and so excessive costs were incurred.
• They were protectors of other family trusts, the beneficiaries of which had a fractured relationship with Cynthia which put them in a position of a potentially conflicting interest.
• They failed to recognise the hurt and distress their actions had caused Cynthia, suggesting their duty of trust and confidence had been breached.

What does this mean in practice?

While this judgment reaffirms the test for the removal of fiduciaries, it also highlights the importance of properly identifying the powers and role of a protector (or protectors) at the outset of a trust. It’s important to consider whether it’s appropriate to have multiple classes of protector and, if so, to define clearly the mechanisms for their appointment and removal, as well as expectations around their respective roles and how any deadlock or dispute can be resolved.

Regardless of intentions, it’s clear the court will be prepared to take steps to remove a protector where they haven’t acted in the welfare of the beneficiaries and in the competent administration of the trust. 

This article was written for Mills & Reeve's Private Affairs - Summer 2026.

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