Law sustains trust in fiduciaries not primarily by ordering redress of losses caused by a falling below fiduciary standards, but rather by requiring that the fiduciary be induced to act as if those standards were met. Wherever possible, the fiduciary is estopped from acting in reliance on the breach, and instead is asked to cure the breach by positive performance of duty. As a fiduciary, you do not keep the illegal profit and proffer compensation for any ensuing loss; rather, you hold the profit for the beneficiary as you always should have done, with loss measures calculated to level any shortfall. This "as if" trusting, enforced by law, solves the conundrum that complete trust properly requires no enforcement, but is self-enforcing, or better, self-fulfilling. This thesis is explored and justified through an examination of the history of accountability and allied modern doctrines controlling fiduciaries who breach their trust.

ISBN: 0006-8047

Epstein's strict liability model of tort law, first stated in 1973, relied on arguments derived from the history of the common law, starting with the late medieval period and extending into the nineteenth century. Since that seminal article was published, legal historical scholarship has deepened our understanding of earlier tort law and brought many new sources to bear, and it has also uncovered a pervasive if quiet Romanistic influence on doctrinal development. None of this new work overturns Epstein's historical intuitions, and his strict liability theory can continue to claim support in the practices of the older common law.

ISBN: 1932-9148

The structure of trust duties yielding a duty to invest with due care derives from the interaction of the power to manage trust assets as a fiduciary owner with a duty to do so with prudence and diligence. In earlier equity mediocre or failed investments were chargeable to trustees only where shown to involve wilful default, which meant choice of investments outside the range or risk profile of those approved by the law or expressly licensed by the settlor or beneficiary. Lord Eldon in the early nineteenth century entrenched the view that only assets with indestructible capital -- for trust funds, gilts and mortgages on a wide safety margin, and in the case of trusts of realty, further land purchase -- were fit targets for trust investment without special authorisation. With more sophisticated capital markets developing in the nineteenth century, parties regularly set up far wider trust powers of investment, and the legal standard shifted towards enforcing prudent investment processes rather than safe results, using a benchmark of common practice to fix the requisite standard of care. American law from the late 1970s shifted to a new default position mandating portfolio investment, once it had become clear that the great majority of professionally managed trusts typically authorised entry into the profitable if volatile stock market; Australian and English law and practice eventually followed. Meanwhile, government policy favouring funded welfare, as opposed to the pre- and post-war fiscal transfer and national insurance systems, led to massive growth of pension capital under trust management. Statutory and curial reforms allowed pension trustees, and then all trustees, to invest unrestrictedly in all asset classes as plenary owners including portfolio stock investment, provided that certain undemanding standards of care and propriety were met. Portfolio investment by trustees was designed to win the 'equity risk premium' for beneficiaries while avoiding the volatility of the capital markets, through bundling into mutual funds permitting index sampling of wide markets and hedging and risk-correlation of equities and bonds. The recent sharp fall in share values allied to the credit crunch and financial banking crisis starting in late 2007 have tested the portfolio theory to destruction. Whether the macroeconomic benefits of market allocation of pension trust capital through unrestricted private choice has delivered sufficient stable welfare to enough individuals is a question the law may be ill equipped to answer. But trust law does have resources to detect individual and collective pathologies in investment conduct and set standards that can direct parties into less destructive paths.

ISBN: 1833-1237

This Article suggests that common ownership, better described as, plural ownership to distinguish the phenomenon from semicommons, may usefully be analysed from a dual perspective. Plural ownership may simultaneously be seen as an aggregation of individualised rights, duties and intentions, and as giving rise to a real entity with a group mind and corporate rights and duties distinct from those of the individual owners. For the purposes of understanding this dualism, the most developed and interesting form of plural ownership is the trust fund with multiple controllers and beneficiaries, an ancient device that now serves as the bedrock of modern capitalism. The fund is here subjected to legal, historical and philosophical scrutiny to uncover how group personality is generated by plural ownership in the absence of formal legal incorporation.

ISBN: 1565-1509

In the early nineteenth century, authoritative treatise writers such as Joseph Story represented Anglo-American trust law as a seamless web. But the transplantation of trusts law from England to America was not a simple process of adherence. Rather, American courts and legislatures came to discard fundamental doctrines of English trusts law, and by such genetic engineering mutated this body of law into a new breed. Restraints on anticipation and on alienation were embraced, and in key state jurisdictions bare trusts were abolished, or else displaced from the core of trusts law. Irreducible settlor power over beneficiaries and the strong protection of beneficiaries from creditors under spendthrift trusts were two strikingly original American creations flowing from these basic doctrinal choices. The changes made to American trust doctrine leads to a paradox for the legal, social and economic historian, namely that republican America ended up with more a dynastic property law, more wedded to the dead hand and more hostile to commercial creditors, than did aristocratic England with its unreformed system of common law and equity rooted in the feudal property system. This paper explains how the English slowly came to commit to relatively free alienability of beneficial interests and the enhancement of beneficiary's powers over trust assets, and then charts how Americans abandoned these commitments. Some fresh interpretations are offered as to why these divergences occurred, rooted in the volatility of credit in America and the desire of the wealthy to escape from the pressures of the market.

ISBN: 1565-1509

Morice v Bishop of Durham (1804-5) is most definitely a leading case in the law of trusts. But it was not cited as authority for any 'beneficiary principle' or 'certainty of objects' rule in the general texts of trusts and equity until well toward the middle of the nineteenth century. Its real celebrity as a leading decision dates to the early and mid-twentieth century, as lawyers grappled with the challenge of amorphous beneficial objects in the new environments of family and corporate tax planning, corporate finance, pensions, and offshore jurisdictions. The urgent problems facing lawyers at the time of Morice were rather different, and harked back to two linked issues that had troubled the legal system since before the Reformation -- controlling the deathbed disherison of heirs, and restraining the putting of testamentary property into mortmain, that is perpetual or 'deadhand' control of property by ecclesiastical bodies or other corporations. This explains why Morice was early picked up by cases and texts on mortmain and charitable uses, and remained rather invisible in the key literatures on trusts. The beneficiary principle had to become controversial before it could be noticed properly as a foundational doctrine.

ISBN: 9781849461542