Legislative changes to clarify the roles, duties, powers and responsibilities of trustees, including trustees of charities, have been proposed by the Law Reform Commission.
The commission made the recommendations in two consultation papers published yesterday.
It commented that general trustee law had not kept up to date with the changing economic and social nature of trusts. The purpose of the papers was to review the law and, where necessary, bring it up to date to accommodate contemporary needs and practices, it stated.
The commission recommended that trustees should be subject to a general statutory duty of care, involving a requirement to act with objective "reasonable care and skill".
Any special knowledge or experience a trustee may have should also be taken into account.
This proposal would assist the courts in clarifying any doubts about the scope of the duty of care, it said.
For charitable trusts, the commission recommended the general duty of care should apply with modifications, by providing that trustees must act in the interests of the charity and to "seek in good faith to ensure that the charity acts in a manner which is consistent with its purposes".
The law should also be reformed to clarify the criteria for appointments and qualifications of trustees, it said.
It recommended that certain persons would not be eligible for appointment as a trustee, for example a minor (under 18); a ward of court; a bankrupt person; a corporate trustee of a trust in liquidation or wound up; a person convicted of an indictable offence or sent to prison; a person who was disqualified or restricted from being a director of a company or had been removed from the office of charity trustee.
The commission recommended that trustees' powers of delegation could be expanded subject to the proposed general statutory duty of care.
Separate recommendations were made in respect of the powers of charitable trustees to delegate their functions, bearing in mind the particular needs that arose in respect of charitable trusts.
The commission said it found no reason for retaining the limitations whereby trustees were limited to insuring trust property up to a maximum of three-quarters of its value, and only in respect of loss or damage caused by fire.
It recommended that trustees be entitled to insure trust property to its full replacement value in respect of loss or damage, however caused.
The commission said the current arrangements under which trustees could invest in "authorised securities" operated satisfactorily and should be retained.
A statutory provision on payment of trustees in general was not recommended.
In relation to charity trustees, the commission said a statutory provision for payment would not be appropriate because the voluntary nature of charitable activities should be maintained to ensure public confidence in their administration.