Protectors and powers of consent in offshore trusts: Clarity from the Privy Council

The Privy Council’s decision in A and 6 others v C and 13 others [2026] UKPC 11 provides guidance on the role of protectors in offshore trusts. The Board confirmed that, absent an express limitation in the trust instrument, protectors are entitled to exercise their own discretionary judgment on the merits of trustee proposals.

The role of Protectors

Protectors are a common feature in trusts in Bermuda and other offshore jurisdictions, that is rarely seen in UK based trusts.  The rationale for them is to address situations where beneficiaries and settlors are located far from the jurisdiction of the trust and where the trustee has little or no knowledge of the needs of the settlor or beneficiaries.

The powers of protectors vary but often include powers to direct or veto:

1. the appointment and removal of trustees;
2. changes to the class of beneficiaries;
3. the provision of information to beneficiaries;
4. changes to the governing law of the trust; or
5. and as is the present case, consent to appointment of capital.

Background to the dispute

The case concerned a group of discretionary family trusts established in the 1950s for the benefit of “A” and “B” and their families.^[1]  In the 1990s, common form provisions providing for the appointment of protectors were included in all but one of the trusts, in connection with moving the administration of a number of the trusts offshore from England to Bermuda.

Under these provisions, the Protectors have two main powers:

1. to approve or refuse any appointment of capital to beneficiaries proposed by the Trustees; and
2. to approve or disapprove any exercise by the Trustees of voting powers derived from certain specified securities.

Notably, the trust deeds did not expressly define the scope of the Protectors’ role when deciding whether to give or withhold their consent.

In 2017, the Trustees developed proposals to restructure the trusts and divide the trust assets between A and A’s family branch, and B and B’s family branch, proposing a starting allocation of 2/3 to A and 1/3 to B. Aspects of the proposals required the Protectors’ consent. The Protectors considered that the proposed scheme did not serve the beneficiaries’ best interests, and so they were unlikely to consent. The Trustees sought a blessing of their proposal from the Supreme Court of Bermuda. This was opposed by B and B’s family and the Protectors, with the latter arguing that they were entitled to withhold their consent on the basis of their independent assessment of the proposals’ merits.

The question considered by the Bermudian courts was: is the role of the Protectors a wider role, which would entitle them to withhold consent based on their own assessment of the merits of the proposals, or a narrow role, which would limit them to confirming that the Trustees were acting lawfully and within the scope of the Trustees’ powers?

The first instance court preferred the narrow role, emphasising the substantive power to deal in the trust was vested solely in the Trustees and noting that a narrow role for the Protectors would still be valuable, allowing them to act as a communications bridge between beneficiaries and offshore trustees.

The Court of Appeal of Bermuda confirmed this approach saying that protectors should function as a watchdog and described a wider role for protectors as “at best a recipe for wasteful duplication and at worst an invitation for deadlock.”

The Privy Council’s decision

The Privy Council unanimously rejected the binary approach adopted by the Bermudian courts and allowed the appeal. The Board held that the question that needed to be considered was not which of two predefined roles the settlor must have intended, but rather what constraints are actually imposed on the Protectors by the trust deed?

In this case, the trust instruments imposed no express limitation confining the role of the Protectors to a review of the lawfulness of the trustees’ decision-making.  In the absence of express wording to the contrary, there is no basis for reading in a restriction that reduces that power to a purely supervisory function. The Board also rejected the argument that a narrow role for protectors could be imposed by an implied term, as this was neither necessary to make the trusts workable in practice or so obvious as to go without saying.

Other noteworthy findings include:

• The term “protector” has not acquired a sufficiently settled meaning in the offshore trust industry for it to imply a specific role: other terms are used for persons with similar powers, and other persons described as protectors do not necessarily have the same powers.
• protectors are fiduciaries who are subject to the usual fiduciary constraints, including no-profit, no-conflict and proper purpose duties.
• However, fiduciary duties do not require protectors to defer to a trustees’ judgment.

Practical takeaways

The case offers several key learning points:

1. Clear drafting is key to ensuring protectors have their intended role under a trust agreement: if a settlor intends protectors to have a limited supervisory function, this must be expressly set out in the trust deed.
2. When selecting and appointing protectors, settlors should have in mind the scope of their intended role.
3. For trustees, meaningful and early engagement with protectors about proposals is required to avoid deadlock situations.
4. In cases of disagreement, advisers should encourage structured dialogue and documented reasoning to manage and resolve disagreements.
5. For new trusts, drafters should consider:
   • setting out explicitly what factors protectors may or may not consider when approving trustee proposals; and
   • how disputes or deadlock are to be resolved.
6. For existing trusts, advisers should consider assessing:
   • the scope of the role of protectors under the trust instrument;
   • whether the current administration of the trust accurately reflects this;
   • if any risk exists where protectors have acted other than in accordance with their role as established under the trust instrument; and
   • whether the trust should be amended in the light of the above.

If you have any questions in relation to the issues raised above, please contact the Burges Salmon team. This article was written by Justin Briggs and Harriette Alcock.