A trustee has a duty to protect and secure the charity’s assets, and this principle extends to compromising a legacy dispute.
Compromises are common in legacy disputes as they avoid the expense of formal litigation or a contested trial.
However, because any formal compromise of a contentious probate claim is likely to be legally binding on the parties it is important to make sure that the wording of the agreement truly reflects the terms that have been agreed.
The Charity Commission guidance also requires trustees to take care to ensure they secure as favourable a settlement as is reasonably possible in the interests of the charity, taking account of all relevant factors.
Among the factors that trustees should consider are:
- how entering into the compromise might affect the charity’s reputation; and
- whether the compromise could impact the charity’s position in other disputes.
In reaching a negotiated, mediated, or compromised settlement of a legacy dispute claim, the trustees should also satisfy themselves that they have the power to implement the actual terms of settlement.
To properly fulfil their duty of care, trustees are expected to make a fully informed decision, taking specialist advice from a suitably qualified person.
Our team is here to offer guidance and are experienced in drafting terms of settlement. We operate a free legacy disputes helpline which charities can contact any time for a friendly word of advice: 0333 888 0439 [email protected]
