Earlier this year the Court of Appeal handed down the judgment in Dawson-Damer v Taylor Wessing, holding that UK based trustees, and importantly UK solicitors acting for non-resident trustees, must provide information in response to a Subject Access Request (SAR) by a beneficiary under the Data Protection Act 1998 (DPA). It is understood that the judgment will not be appealed to the Supreme Court, yet the decision is causing some consternation, particularly amongst trust practitioners.
Mrs Dawson-Damer was the beneficiary of a Bahamian-law discretionary trust, represented by UK solicitors Taylor Wessing. She was contemplating legal action against the trustee in the Bahamas for breach of trust. She served a SAR on Taylor Wessing in the UK. The purpose of the request was to obtain information for the proceedings in the Bahamas, in which she was challenging a large appointment out of the trust in favour of other beneficiaries. Taylor Wessing declined to answer relying on the legal professional privilege exemption in the DPA.
At first instance HHJ Behrens QC found that Taylor Wessing was entitled to refuse to answer the SAR. Mrs Dawson-Damer appealed and the Court of Appeal reversed the decision.
The decision is significant for trustees, beneficiaries and data protection professionals alike. At first glance it appears that beneficiaries might be able to use the DPA to get around the long-standing rule in Re Marquess of Londonderry’s Settlements; that trustees are not bound to disclose documents relating to their decision how to exercise a discretionary power of appointment.
The fact that Mrs Dawson-Damer succeeded in her application against UK based lawyers advising the trustees is significant for offshore trustees using lawyers in the UK. They will need to carefully consider how their deliberations are documented and held on their solicitors’ (and other advisors) files. Whereas the local law of the trust may preclude disclosure, the Dawson-Damer case provides a gateway for dissatisfied beneficiaries to obtain information from UK based advisors (whether lawyers, accountants or otherwise), in support of claims they wish to bring against trustees.
Notably, DPA s.7(4) may provide limited grounds for trustees and their lawyers to withhold information. They would not be obliged to disclose information which cannot be disclosed “without disclosing information relating to another individual.” For example, the deliberations of trustees concerning the competing claims of other beneficiaries would not be disclosable under the SAR regime.
Nevertheless, this new development is undoubtedly helpful to beneficiaries and we expect to see SARs being used far more frequently, particularly where offshore trustees are using UK based advisers.