The recent well-publicised dispute within the Actor’s Benevolent Fund involving such national treasures as Dame Penelope Keith and Dame Sian Phillips is a salutary lesson in just how damaging rows between trustees can be – whether they are acting on behalf of a national charity aimed at providing help and support to actors who cannot work because of accident, illness or old age or on behalf of a family trust where the people intended to benefit are all related to the trustees. What if trustees can’t agree?
The case | Actor’s Benevolent Fund
In the case of the Actor’s Benevolent Fund, the row came about because of a dispute between the Council of Trustees, which included Dame Penelope Keith, Dame Sian Phillips, James Bolam and Bill Gaunt who were in charge of the overall running of the trust and the charity’s (now ex-) General Secretary Jonathan Ellicott and younger supporters of the Fund. It related to the running of the trust and the prioritising of how the trust funds were spent.
The row appears to have started because the younger members wanted the trust to have a more modern outlook on who should be supported so that there was greater diversity, openness and relevant help for actors who were experiencing mental health issues needing greater medical and crisis support. There is no suggestion that the older members did not support those aims, but they did not feel a complete overhaul of the workings of the trust was needed. And while the charity has over £30 million, they were concerned to ensure that existing areas of support did not lose out.
The aftermath | what if trustees can’t agree?
The acrimony between the two groups became so vitriolic that along with allegations of bullying, harassment and victimisation, it became necessary for a security guard to control who attended Council meetings and the Charity Commission (who oversees the good governance of charities registered within England and Wales) became involved.
While this is all excellent newspaper content, at the heart of it is a very real and very common problem for trustees. How do you handle a disagreement on how to manage the trust when each side is arguing in support of a very valid cause, but it is not possible to stretch the trust funds to meet every identified need?
How do you handle a disagreement
The answer is – of course – to compromise, which is easy to say but not always easy to do. If you are a trustee caught in this difficult position, then you need to bear in mind that trustees have to unanimously agree to trust decisions – it is not a majority vote. One of the best ways to start working the problem through is to agree (1) what the decision to take is and (2) what the options are. Trustees are also expected to take relevant advice when it comes to making complex decisions – so if there is not enough information to work out which is the correct way forward, the trustees should agree how they are going to gather all of the information necessary in order to make an informed decision. That information could be cost quotes for property maintenance, income projections from financial managers or advice from a chartered surveyor regarding the best way to market a property.
Once trustees have all the information they need (or can get) in order to make a decision, they should try to work together to identify what is in the best interests of the trust and the beneficiaries and act accordingly. That may involve (where appropriate/possible) simply asking the beneficiaries what they would prefer – if all the beneficiaries are in agreement with a particular course of action then it may be simplest to let them decide.
Summary
If trustees cannot reach a consensus, even with the input of the beneficiaries, then they are able to apply to the Court for a decision. The Court will need to be given a full account of the details of the trust, the decision to be made and who it will affect and how, in order to reach a decision. It is common in matters such as these for the Court to also direct further investigations to be made. If the Court believes that the trustees have behaved reasonably then it is likely to order the costs of such an application to be paid out of trust funds. However, if the Court feels a trustee has behaved either unreasonably or improperly then they may well order the costs of the application to be paid by the unreasonable trustee out of their own funds, so there is a significant incentive for trustees to behave reasonably and responsibly – which is what they should always aim to do.
If you have any further enquiries regarding the question ‘What If Trustees Can’t Agree?’, please feel free to contact Inheritance and Trust Disputes team.