He says when making decisions trustees have an "obligation to inquire" beyond what they would have in the past.
Clews, speaking at the recent Rutherford Rede Trust Service conference, says in the future trustees won't be able to rely information from so-called experts as their defence, rather they will have to inquire beyond the scope of the expert's report.
This "obligation to inquire" is not something that is imposed expressly on trustees, neither does not come from any new statute or judge made law, however it is one which society will demand.
Such an obligation creates two important situations for trustees. Those who do not use information which is readily available when making decisions is likely to become a potential target for claim. On the other hand the trustee who is so armed has the opportunity to differentiate himself from others, and vigorously defend any potential claims.
"The dynamics of our society will be such that the millennial litigant will expect more of professional trustees than many deliver and will be supported in doing so by the courts."
Two of the factors that will affect the standards for professional trustees are the ageing population and falling land values.
In the first instance people are going to live longer and will require better performance from their retirement savings.
"For investment returns to be 'in the ballpark' may not be sufficient in all cases to protect a professional trustees from liability."
Similarly, many trusts have farms as their key assets. As farm values continue to diminish, so to will the value of the trusts, thus putting pressure on trustees to perform.
The questions will be; has the farm been held on too long to protect the capital value of the trust for the benefit of succeeding generations? Has the land been applied to the uses which get the best value?
These issues will shift the debate about trustee's obligations away from the base line that a trustee does not guarantee the trust fund and onto issues of comparative performance.
As a result of this trustees will have to have a better understanding of investment issues.
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