The Privy Council gave judgment this year on an appeal from the decision of the Court of Appeal of Bermuda in Mutual Holdings (Bermuda) Limited and others  UKPC 13 (97 KB PDF). The major issue concerned an allegation of fraud made against three corporate and four personal defendants (who included ex employees of the Mutual Group) in respect of the rent a captive facility operated by the Mutual Reinsurance Management Group. In broad terms, the defendants were alleged of overstating the extent of the plaintiffs’ exposure under a complex programme of insurance and reinsurance, thereby inducing them to order reinsurance which they did not need and to renew the programme for a further year on amended and disadvantageous terms. The trial judge in the Supreme Court of Bermuda rejected this allegation on the facts but the Court of Appeal upheld it and made findings of fraud against two of the corporate and one of the personal defendants.
There has been a significant increase in contentious and non-contentious trust matters arising from family disputes in relation to Bermuda trusts. Most often these involve wealthy international dynastic families or family corporations.
The type of matters we see before the Bermuda Courts include applications for variation of trusts or sanctions of a compromise between the trustees and various classes of beneficiary and/or the consent of the court on behalf of minor beneficiaries; applications for directions eg. relating to disclosure or distribution of assets; applications to remove trustees for breach of their duties or recovery assets allegedly lost as a result of breach of the trustees’ duties; and applications to set aside the whole trust on the grounds of fraud, undue influence or the uncertainty and failure of the trust objects.