Legal Blog

Thursday, November 08, 2012

A Curacao Trustee has a duty of care

A duty of care is justified in those cases where someone entrusts his financial or other interests to another or takes care of these himself with the assistance of the other, particularly because that other possesses more knowledge and experience in that field.

The law formulates as a general standard that the Trustee is liable if he fails to exercise due care as a good Trustee unless he cannot be blamed for the failure (Section 3:143 subsection 1 Curacao Civil Code {‘CCC’}). This relates to a duty arising from the law. The extent of the duty of care is also determined by the fact that the Trustee is entrusted with the administration of assets and therefore that he has a position of trust (Section 3:135 subsection 1 CCC).

If there are multiple Trustees, they will each be jointly and severally liable (therefore for the whole). However, a Trustee who can prove that he cannot be blamed for the respective fact and also that he had not been negligent in taking measures to stave off the consequences of it, will not be liable (Section 3:143 subsection 2 CCC). In this connection a double standard must be complied with: not to be blamed for the fact and not having been negligent in taking measures. So it is not an option to do nothing while the other Trustee makes mistakes.

Liability for losses as a result of the Trustee's intention or conscious recklessness cannot either be limited, or excluded in the trust deed, nor in any other way (Section 3:143 subsection 3 CCC). Any Trustee willfully inflicting damage or accepting the avoidable risk of damage occurring, will be liable and this liability cannot be limited or excluded either. Liability for loss which is not a consequence of conscious recklessness or intention can in principle be limited or excluded. It is obvious that such an exoneration provision should be included in the trust deed, though it is not necessary.

Filed under: Finance by Karel Frielink.



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