Danielle Cahill

Introduction
Few decisions in modern trust law have had as far-reaching consequences as Pitt v Holt; Futter v Futter. (1) At first glance, the Supreme Court appeared to be redefining the scope of the Hastings-Bass jurisdiction within English law, but, more than a decade later, its true legacy is global in nature. 

Rather than bringing certainty to the law governing trustee mistakes, however, Pitt v Holt has accelerated the divergence of trust law across the world's leading international financial centres.

The courts of England and Wales have chosen to prioritise fiduciary discipline, restricting relief to cases involving breach of duty, but many of the world’s leading international trust jurisdictions have adopted a different approach. Jersey, the Cayman Islands, the British Virgin Islands and the Dubai International Financial Centre (DIFC) each enacted statutory regimes restoring broad remedial powers to unwind trustee mistakes, while Guernsey and the Abu Dhabi Global Market (ADGM) remained broadly aligned with the English model.

The result is no longer a single common law doctrine but two competing philosophies of equity: one asks whether trustees have breached their duties, and the other asks whether justice requires an honest mistake to be corrected. As a result, identical trustee decisions can now produce entirely different legal outcomes depending on the governing law of the trust. 

That distinction is no longer merely doctrinal. It has become commercial. In an increasingly competitive international trusts market, the availability of remedial relief is itself part of a jurisdiction's attraction.

Pitt v Holt: More than a domestic decision
Before 2013, the rule in Hastings-Bass had evolved into what many practitioners regarded as equity's safety valve. Trustees who had exercised discretionary powers without properly considering relevant matters, or had acted upon fundamentally mistaken assumptions, could often persuade the court to unwind the transaction. 

The Supreme Court decisively recalibrated that approach.

Lord Walker held that an exercise of discretion would not be set aside merely because the outcome proved unfortunate. Relief under Hastings-Bass depended upon establishing that the trustee's flawed decision-making amounted to a breach of fiduciary duty. (2) Where trustees had acted on apparently competent professional advice, no breach would ordinarily arise simply because that advice later proved incorrect. (3)

The practical consequence of the decision was significant. Applications increasingly shifted towards the separate doctrine of equitable mistake, which survived Pitt v Holt, but only where the relevant mistake was sufficiently serious that it would be unconscionable to leave the transaction uncorrected. (4) Rectification likewise remained available, but only where a document failed accurately to record the parties' true intentions, rather than because the decision itself had proved misguided. (5)

From the perspective of English law, Pitt v Holt reaffirmed that equitable intervention should focus on the trustee’s decision-making process rather than the consequences of the decision itself. 

The seismic decision sent ripples through international waters, and the offshore jurisdictions were quick to react. What followed was not simply judicial debate, but legislative divergence. 

A global divide emerges
A major consequence of Pitt v Holt has been the divergence in the development of trust law across several leading international financial centres.

England and Wales’s approach has in fact been followed in relatively few of these jurisdictions. Guernsey is one of the few that has confirmed that its Hastings-Bass jurisdiction operates substantially to the same effect as English law, requiring a sufficiently serious breach of fiduciary duty before relief may be granted. (6) The ADGM, by applying English common law and equity through the Application of English Law Regulations 2015, has likewise adopted the Pitt v Holt analysis. (7)

Elsewhere, legislatures have consciously sought to preserve a broader remedial jurisdiction, and it is particularly noteworthy that this divergence has been actively sought through legislative intervention, rather than the slower (and retroactive) effect of incremental judicial decisions. 

Jersey responded by introducing Articles 47E to 47H of the Trusts (Jersey) Law 1984, expressly empowering the Royal Court to set aside fiduciary decisions where relevant considerations had not been taken into account, irrespective of fault. (8) The DIFC enacted similar provisions in its Trust Law, authorising relief "whether or not there was lack of care or fault." (9) Comparable statutory reforms followed in the British Virgin Islands (10) and Cayman Islands, (11) each restoring broad remedial powers that Pitt had curtailed in England. Recently, the emerging Cayman authorities suggested that section 64A is being interpreted in an increasingly nuanced manner, and that the Grand Court is adopting a fact-sensitive approach to fixing trustee mistakes. (12)

These reforms reflect deliberate policy choices. Rather than viewing Hastings-Bass primarily as a mechanism for policing fiduciary conduct, these jurisdictions have preserved a broader and more flexible corrective approach, designed to maintain confidence in sophisticated international trust structures.

The UAE: a study in contrasts
No comparison better illustrates the post-Pitt v Holt landscape than the contrasting approaches adopted by the DIFC and ADGM.

Separated by little more than a one-hour flight, both financial centres compete for international wealth management business. Both jurisdictions offer English-language courts, sophisticated commercial legislation and common law principles designed to attract international wealth. 

The DIFC legislature deliberately adopted the broader Hastings-Bass approach. Articles 24 to 28 of the DIFC Trust Law permit the court to set aside fiduciary decisions where relevant considerations were overlooked or irrelevant matters considered, regardless of whether trustees acted negligently or committed any breach of duty. (13) By contrast, ADGM (as touched on above) effectively imported Pitt v Holt and its narrowing effect. (14)

The result is striking. Two neighbouring financial centres, pursuing broadly similar commercial objectives, have nevertheless adopted differing approaches to remedying trustee mistakes. For trustees establishing new structures, with stark variation even in adjoining jurisdictions, governing law is the decisive factor and may determine whether an expensive mistake can ever be undone.

Different policy choices 
Why, then, did so many offshore jurisdictions choose not to follow England's lead? In part, the answer lies in commercial reality.

International trustees administer increasingly complex structures involving multiple jurisdictions, changing tax regimes and sophisticated investment vehicles. Even the most diligent trustees cannot eliminate every possibility of error. Legislatures therefore faced a policy choice: should honest mistakes be irreversible unless trustees first establish their own breach of duty, or should courts retain broader powers to prevent unjust outcomes? 

English law gives precedence to fiduciary accountability and legal certainty. Offshore jurisdictions have tended to place greater emphasis upon preserving trust structures where mistakes occur despite conscientious decision-making, preserving broader remedial powers. Of course, that does not mean that one approach is inherently superior, but it does reflect different conceptions of equity's role within modern trust administration.

Viewed through that lens, Pitt v Holt became more than a leading authority on Hastings-Bass. It marked the point at which leading trust jurisdictions began consciously to differentiate themselves in their approach to correcting trustee mistakes.

Looking ahead
The enduring significance of Pitt v Holt lies not simply in its reformulation of one equitable doctrine but in the international conversation it has provoked. 

Today, trustees are operating in a legal environment where the availability of remedial jurisdiction has become part of a financial centre's broader commercial offering, alongside tax neutrality, regulatory sophistication and judicial expertise. Rather than moving towards a uniform approach, jurisdictions have reached different conclusions as to the circumstances in which equity should intervene to correct trustee mistakes. How a trustee’s mistakes can be remedied has in itself become a competitive feature of modern trust jurisdictions.

For trustees and advisors, the practical significance is clear: the governing law of a trust may determine not only how a trust is administered, but whether an honest and otherwise irreversible mistake can be undone. In that sense, Pitt v Holt did more than reshape English trust law; it altered the competitive landscape of international trust administration.

Footnotes
1,  Pitt v Holt; Futter v Futter UKSC 2
6,  M v St Anne's Trustees Ltd (Guernsey Court of Appeal, 20 June 2018)
7,  Application of English Law Regulations 2015 (ADGM); AC Network Holding Ltd v Polymath Ekar SPV1 (ADGM Court of Appeal, 17 November 2023)
8,  Trusts (Jersey) Law 1984, arts 47E–47H (inserted by Trusts (Amendment No. 6) (Jersey) Law 2013)
9,  DIFC Trust Law No. 4 of 2018, arts 24–28, especially arts 25(4) and 27(4)
10,  Trustee (Amendment) Act 2021 (BVI), s 59A
11,  Trusts Act (2021 Revision) (Cayman Islands), s 64A; Re Settlements made by Declarations of Trust dated 9 May 2013 (Grand Court, 28 September 2023); In the Matter of the S Trust; AA v Cititrust (Cayman) Ltd and others CIGC (FSD) 85
12,  In the Matter of a Settlement known as the D Trust; Trustee v AB and others CIGC (FSD) 23
13,   DIFC Trust Law No. 4 of 2018, arts 24–28
14,  AC Network Holding Ltd v Polymath Ekar SPV1 (ADGM Court of Appeal, 17 November 2023)

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About Hugh James
Hugh James is a full-service, top 100 UK law firm, and the largest law firm in Wales, offering specialist legal and financial advice to businesses, organisations, and individuals. It was established in 1960 and now employs more than 700 staff across its sites in Cardiff, London, Manchester, Southampton, and Plymouth. 

About the author 
Danielle Cahill is a partner in the private wealth disputes team in London, with a particular focus on developing Hugh James’ cross-border and offshore disputes practice. Danielle spent 13 years of her career in Clifford Chance’s top-tier litigation and dispute resolution practice acting on high-profile cases involving capacity and power of attorney issues in the High Court and Court of Protection. Her expertise lies in representing high net worth individuals in complex family disputes, as well as advising trustees, commercial and banking clients.