The trust laws of Jersey and Guernsey are very similar for two main reasons.

Both jurisdictions imported the trust from English law as it is not part of the ancient Norman customary law upon which Jersey and Guernsey law are based, so statute was used to create certainty.

Jersey enacted the Trusts (Jersey) Law 1984 (“TJL”), which has seen five major amendments, the last, Amendment No. 5, is due to be approved by the Privy Council in October 2012 to keep it up to meet the needs of an increasing competitive and global market. The Trusts (Guernsey) Law, 1989 was very much modelled on the Jersey statute (as indeed is the trust legislation of a number of other jurisdictions), and was also amended a number of times. That statute, with further developments, was consolidated into the Trusts (Guernsey) Law 2007 (“TGL”). Thus whilst the TGL may appear to be much more modern that than the TJL, this is only by virtue of the consolidation into a new statute rather than further amendment of the existing one, and the common statutory root remains, which is one reason for the similarity.

The second reason is that whilst Jersey and Guernsey are separate jurisdictions and have their own separate Royal Courts, they have a common Channel Islands Court of Appeal which is staffed by the Bailiff’s of Jersey and Guernsey and 12 English and Scottish QC’s who sit quarterly in any event and occasionally as required. The decisions of this common appellate court are binding in both jurisdictions and this has meant that the decided case law in both jurisdictions is very similar.

There are identical or very similar provisions in respect of the follows:-

  • permission for non charitable purpose trusts.
  • the option to create trusts with no perpetuity period.
  • reservation of powers to the settlor without invalidating the trust.
  • removal of personal liability of directors of corporate trustees.
  • limitation of trustees’ liability to fraud, wilful misconduct or gross negligence
  • exclusive jurisdiction of the Royal Court.
  • third party whose consent is required not being thereby a trustee.

However, there are a number of differences which are worthy of note:-

  • Guernsey has a non-statutory lien over trust property for liabilities incurred by a former trustee in his capacity as trustee. This does not yet form part of Jersey’s legislation.
  • disclosure of information to beneficiaries
    • Jersey’s position is that the TJL does not create any right to disclosure and indeed protect trustees from disclosure of discretionary decisions, but under case law there is a strong presumption in favour of disclosure of the trust instrument, trust accounts and supporting documents such as investment portfolio valuations, with a judicial discretion to override that. By contrast Guernsey has a positive statutory provision in favour of disclosure in the new TGL.
  • Guernsey trusts can own land in Guernsey, but Jersey trusts cannot own land in Jersey.
  • The new TGL contains an express power for trustees to issue Powers of Attorney, but there is no such provision in the TJL. However the TJL does have express provisions for delegation and trustee liability in respect thereof.
  • Under the new TGL judgements and any settlement agreed by the trustees or mediation findings in respect of the trusts are binding on the beneficiaries, which precludes any possibility of beneficiaries taking action against the trustees in respect of them. Jersey has no such expressed provision.

Unless any of the particular issues highlighted are of particularly relevance there is very much a level playing field between Jersey and Guernsey in terms of their respective trust laws.