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David O'Hanlon


Trend-spotting themes can be difficult but, on that note of caution, we can still try to identify some common threads from the work that has kept the fiduciary team busy.

We found ourselves dealing with a noticeable increase in retirements or removals of trustees.  The main reason behind this seems to be a move by a number of the large institutional providers of trustee services to divest themselves of their trust 'books'.  Speaking to the institutions, this seems to be mainly driven by a redrawing of the risk profile of the global business and some post-financial crash soul-searching.  As the markets begin to settle the institutions had the opportunity to review their current business lines and a number took the step of focusing their resources into the provision of fewer, more profitable services. But where there is change there is always opportunity, and as a result we have seen an increase in a number of smaller trust companies who are able to provide a more bespoke, family office-style service.  

This worked in tandem with the other trend of settlors/founders choosing to create dual estate planning structures – one for business or 'golden egg' assets and an entirely separate structure for the rest of the family wealth.  Settlors/founders have been balancing the two competing objectives of asset protection and administrative cost, and asset protection definitely won in 2015.

It was a similar story on the semi-contentious work carried out by the team.  Whereas in 2014 the majority of the semi-contentious work related to trustee or beneficiary applications seeking variations or amendments to the terms of the trust, in 2015 the majority of similar applications related to or arisen out of the removal of trustees.  Often the issue for the trustee centres around the security the outgoing trustee may reasonably require on its retirement, often with specific liabilities in mind.  A few recent judgments have provided some guidance for trustees as to how far they are able to push for security while still acting 'reasonably'.  

“We are seeing an increase in a number of smaller trust companies who are able to provide a more bespoke, family office-style service”

Finally, as Courts in other jurisdictions began to take some bold steps in allowing the enforcement of the judgment debts of beneficiaries or settlors against trust assets, we saw an increase in trustees seeking early advice on what they may need to do in order to protect the trust assets and comply with their obligations.  Trustees are becoming (or have to become) more proactive in their approach when they become aware that trust assets could come under assault from strangers to the trust as a result of claims against beneficiaries or settlors and as a result are looking at what steps can be taken to try and protect the trust assets.  This means that trustees are now considering whether to exclude certain beneficiaries, vary trusts or appoint out assets in order to protect the assets for the remaining beneficiaries.  As this area of law continues to develop we can only see the thought process of the trustee's having to develop alongside, or ahead, of those advances.

That's not to say the Courts have been entirely preoccupied with the removal of trustees or protection of assets.  Further developments and decisions creating new law have come thick and fast this year on topics such as the role of protectors (In the matter of the K Trust); tests for 'insolvent' trusts (Re: Z II Trust in Jersey); trustee exculpation clauses (Zaleski v GM Trustees Limited); and the conclusion to the Court of Appeal judgments in Investec –v- Glenalla.

It will be interesting to see how these developments filter through in the next few years, particularly the approach of the court in relation to 'insolvent' trusts, which has now also been identified as an issue for future policy consideration by the Guernsey Financial Services Commission.

“Trustees are becoming more proactive in their approach”


Risk & Regulatory

Nin Ritchie

Updates and trends

Risk and regulatory instructions came thick and fast throughout 2015.

Without doubt, the exponential growth, for us and across the market, arose directly from enforcement action instigated by the Guernsey Regulator against its licensees.

“Advice given on regulatory enforcement action tripled”

Simply put, advice given on regulatory enforcement action tripled. Coincidentally, the reasons are likely to be threefold (1) a much tougher regulatory regime locally (and globally) in the wake of the financial crisis (2) the creation of a standalone regulatory enforcement division unwaveringly focused on achieving outcomes; and (3) the Guernsey Regulator feeling the heat of its own results driven regulatory bodies (the likes of MoneyVal) bearing down upon it.

Outcomes of investigations differed wildly and were largely dependent upon what the client wanted to achieve and what they considered to be a palatable settlement. Early settlement is strongly encouraged by the Commission, visibly demonstrated in public statements such as "The Licensee agreed to settle at an early stage of the process and this has been taken into account by applying a discount in setting the financial penalty.", and more often than not, that is achieved. We advised on and negotiated a spread of outcomes spanning remediation, fining, public statement and discontinuation of business (including through application to the Royal Court). In 2015 the Commission published: £540,000 in fines, six prohibition orders, two voluntary licence surrenders (related to enforcement action ) and four successful applications for administration orders in respect of Guernsey funds.

“without a doubt Guernsey is viewed as a well regulated financial services jurisdiction”

We saw financial crime instructions gently decline in number. However, in light of the Jersey case of  AG v Michelle Jardine and STM Fiduciaire Limited, where the central issue was whether or not an MLRO's decision not to report was reasonable (MLRO Michelle Jardine was represented by Collas Crill and acquitted), it is quite possible that we will see a greater concern amongst MLROs in this area. This is (we understand) the first time in the Channel Islands that anyone faced a criminal prosecution for failing to file a Suspicious Activity Report as opposed to facing civil regulatory sanctions.  

Throughout 2015 we gave a steady stream of advice on data protection and data security requirements. With data security breaches hitting the headlines with increasing regularity, and as technology develops and firms look to centralise resources and/or look to 3rd parties to provide specific functions, we expect data management will most certainly take a hike up the regulatory agenda.

Sanctions matters always raise interesting and often new issues. We see that there is a real opportunity in this space for clients to mark out some territory within the market if they are willing to deal with jurisdictions that are touched by sanctions provided that they go into it with eyes open, implement appropriately robust controls and risk price their services.

To round up, the upside is that without a doubt Guernsey is viewed as a well regulated financial services jurisdiction. But, for smaller clients without the benefit of the backing of a large international parent the fast evolving and increasingly burdensome regulatory framework can be a huge burden, expensive (at times prohibitively) and most certainly one where lethargy or poor judgement can be deadly.

The risk and regulatory team boasts an excellent blend of experienced risk and regulatory lawyers with specialist regulatory backgrounds and exposure that span non-contentious and contentious regulatory and risk practices.

Risk & Regulatory


Recognition by the Regulator, through consultation, of the developments in technological initiatives for undertaking customer due diligence brought a brief sunny spell of hope to financial services businesses in 2015. A sustained settled period is expected now the new amendments, with appropriate regulatory safeguards, have been introduced into the CFC/TF Handbook.

Revision of Guernsey's regulatory laws, at torrential levels,  are expected to hit Guernsey at towards the end of 2016 if the Guernsey Regulator sticks to its own proposed timetable.  While overdue, this will almost certainly cause widespread flooding.

Enforcement action strikes on individual licences are expected throughout 2016 as the Regulator's enforcement team show no signs of slowing down.

A fresh breeze brings in the introduction of the Channel Islands Financial Ombudsman, with powers to investigate and settle complaints resulting in a wind of change on the approach to the resolution of complaints across Jersey and Guernsey.  This may bring about tricky conditions for some but those who are squared away should be set fair.

A chilly north wind may blow onto our southerly isle as we foresee a risk of extra territorial reach by the HMRC if it proceeds, as threatened, to introduce its proposed offshore tax evasion laws. If so, expect to roll out a blanket covering of new policies and procedures.

With Guernsey being an early adopter of the Common Reporting Standard, firms will need to undertake work throughout 2016 to ensure compliance including: revising client agreements, updating policies and procedures and considering any data protection issues that may arise. The first information exchanges are expected in September 2017.



Michael Adkins


It was an interesting year for Collas Crill's insolvency team. Reflective, we understand, of insolvency instructions across the Island in 2015, Collas Crill's experience has been a little like a doughnut. We continue to be involved with a couple of very large matters (Carlyle Capital, Landsbanki) and a host of relatively small matters which throw up all sorts of interesting unusual issues, but not much in the middle.

That said, we would expect that our clients wouldn't (and shouldn't) be shedding too many tears that core insolvency work is getting a little softer than it has been in preceding years.  Overall we think that is indicative of positive movement in the broader market, confidence is up and very slowly (but surely) liquidity is starting to flow back into structures that have been in a holding pattern for the last 6 or so years. What that has meant for us is that we are providing more strategic advice around insolvency issues – for creditors, banks and directors –  thus avoiding in most cases a rush to the Court door to bring down the curtains.  In our view, this can only be a good thing for all concerned.

“We are providing more strategic advice around insolvency issues – for creditors, banks and directors – thus avoiding in most cases a rush to the Court door”

Big change is afoot with the much awaited, and needed, overhaul of Guernsey's Insolvency Law. Collas Crill's Ian Kirk has been an integral member of the Guernsey Bar's advisory committee on the new law and the insolvency team have fed into the process at various levels.

The new law, once in force, should be a major step forward in Guernsey insolvency and be beneficial to IPs, lawyers and business generally in providing certainty to the process. It should allow us to manage costs and expectations to a greater degree than we have in the past, while still retaining the levels of flexibility which enable us to implement solutions in Guernsey that may be more difficult to achieve elsewhere. Case law in 2015 showed a continued development of Guernsey's common law in this area.  We saw the first 'pooling' of Jersey and Guernsey Insolvencies (Heulin Renouf) and we had the local implementation of the Privy Council's decision in Singularis, with LB Hazel Marshall QC applying the restrictions in mutual assistance embodied in that decision as part of Guernsey law  (Re X).

The other big issue that has kept Jersey and Guernsey practitioners busy is the concept of 'trust insolvency' – it has rapidly gone from a concept of doubtful existence, to the subject of a handful of decisions and several industry seminars considering the practicalities of dealing with a problem that definitely does exist, even though technically it probably shouldn't.

2016 should be an exciting year for the wider Collas Crill insolvency team.  Locally, we are very pleased to have added the highly respected David Moore to our insolvency team and with our Cayman office well and truly established as a leader in this field, under the leadership of Stephen Leontsinis, we can now offer a coordinated insolvency practice drawing on the wealth of local and international expertise across Jersey, Guernsey, Cayman and Asia. We can provide a unique offering particularly for our institutional clients who have touch points and structures across the jurisdictions. We are one-stop (insolvency) shop where clients can be assured of getting the same high quality Collas Crill service.



“We can provide a unique offering particularly for our institutional clients who have touch points and structures across the jurisdictions”