The Contribution of Fiduciary Law

Abstract

Frederic Maitland, the renowned historian of English law, called the trust 'the greatest and most distinctive achievement performed by Englishmen in the field of jurisprudence'. The trust is certainly a great achievement. Yet is the trust distinctive? Much ink has been spilled on the question. On the one hand, 'trust-like' devices appear in other legal systems – for example, the Roman fideicommissum, the German Treuhand, and the Islamic waqf. On the other hand, none of these trust-like devices is precisely the same as the trust.

This paper does not aim to settle the matter of the trust's distinctiveness but instead begins with a separate but related question: What can Anglo-American trust law contribute to other legal systems? More than a decade ago, this question was posed in two often-cited articles by Professors Henry Hansmann and Ugo Mattei. The articles assess the 'special contribution' of the law of trusts, both within the U.S. legal system and from the perspective of comparative law. The assessment is striking: that trust law's 'most important contribution' is what other scholars have called 'ring fencing': separating trust assets from the personal assets of the trustee, thereby defining the rights of third-party creditors. In contrast, the role of trust law in fiduciary governance is labeled 'relatively unimportant'. The argument is noteworthy because much of Anglo-American trust law is fiduciary law, defining and regulating the trustee's powers and obligations with respect to trust administration.

This paper, prepared for a symposium on "The Worlds of the Trust" at McGill University, offers some reflections on the current contributions, and the potential for future contributions, of trust fiduciary law within the Anglo-American law of trusts and in legal systems outside the common law.

Keywords: trust, fiduciary

JEL Classification: K39