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Grasping the nettle on dispute resolution

Paul Buckle, director, Trust Corporation International, 13/09/2021

The high-profile split of Bill and Melinda Gates earlier this year was accompanied by a benign message of no longer believing in mutual growth. A nice sentiment of course, but sadly not the reality for many separations, or indeed family disputes more broadly.

In the trust world we’re unfortunately seeing an increase in familial disputes involving trusts and associated structures, but why is this and how can fallouts be mitigated or even avoided altogether?

An increase in disputes

Disputes are a fact of life, and an unwelcome reality, and they are just as much a reality for the ultra-wealthy as they are for all of us. All families disagree and sometimes fight, but in the case of high-net-worth individuals, there is often more to fight over, not to mention the complex structures and arrangements in place that govern those assets and dictate their ownership.

As a result, we often find ourselves managing contentious situations across trusts, pension schemes and companies. So you could say that disputes – minor and major – are increasingly common across the board.

Anticipate to prevent disputes

Sometimes a fiduciary is only involved once the dispute is in full swing. But a good trustee should be trying to spot problems before they occur and be intervening to open a dialogue and prevent the situation from getting any worse. These situations often escalate because they are ignored and placed in the ‘too-difficult’ box.

Constructive dialogue is the best way to pre-empt a dispute, but even where the matter of contention has already come to light, hope is not lost. At Trust Corporation we believe that with careful management and guidance disputes can be resolved, very often amicably, out of court and to everyone’s satisfaction.

To be able, as a fiduciary, to manage, understand and positively contribute to disputes, technically and tactically, is an acquired skill (and very different to that of an adviser). Yet it is not a skill that is widely available.

Those looking for proactive dispute resolution need a trustee who will confront difficult situations head on, whether that’s in the private wealth arena, or related to pension schemes, unit trusts or investment funds.

What trustees can do

Of course trust disputes are very different from ordinary commercial disputes and bring unique pressures; they can be emotionally distressing, financially expensive and vastly damaging to reputations. Trust disputes can be intensely personal and highly charged for those involved. A trustee therefore needs to bring not only independence and a fresh perspective to the situation, but also needs to strike the delicate balance between being dispassionate but empathetic. Above all, you need to stay calm.

Good trust work is built on solid relationships, so we always work with our clients as partners and identify what is important to them. That informs all aspects of our work, where we are pragmatic and meticulous, commercially astute in our dealings with third parties and robust in the face of a challenge.

Our experience in the contentious space is based on our team’s expertise and varied backgrounds. Many of our staff have legal, tax and accountancy backgrounds which means whilst we are not advisers, we are well placed to identify and understand the issues at an early stage.

 These days contentious work is sadly unavoidable but if you have to confront it, you should do it with confidence and sensitivity.

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