A Study On The Liability Of The Trustee For Damages

The trustee is the core of the trust,and the realization of the trust purpose depends on the faithful and efficient management of the trust property by the trustee who is abided by the code of conduct.The trustee's management of the trust property are the focus of the trust law.Therefore,the trust law must respond to such a question: when the trustee breach of trust,how to remedy the damage caused by the misconduct to the trust property,in other words,what responsibility the trustee shall assume for the misconduct?The rules on the trustee's liability for damages in the intra-trust relationship in the Trust law of the People's Republic of China(hereinafter referred to as “Trust Law”)are scattered in five provisions in Chapter 4.Parties to a Trust of the Trust Law,which are: Article 22 I,Article 26 II,Article 27,Article 28 II and Article 30 II.There are three problems about the trustee's liability for damages in the trust internal relationship according to the provisions of the Trust Law:(1)the provisions which regulate trustee's same misconduct of the Trust Law about the trustee's liability for damages have different constitutive requirement and effects;(2)the provisions of the Trust Law on the method of compensation and the scope of liability for damages are vague,especially whether the profit from the trustee's breach of the duty of loyalty can be can be regarded as the trust property's damage and adjusted through the system of liability of damage;(3)Article 22 I of the Trust Law provides both the right of revocation and the right to claim damages,which leads to the confusion of the relationship between preceding two rights.Chapter 1 is the introduction,and divided into two parts.Section 1 summarizes the status of the trustee in the trust relationship and further sorts out the provisions of the trustee's liability for breach of trust in Trust Law.Section 2 analyzes the conflicts among five provisions about the trustee's liability for breach of trust of the Trust Law,and summarizes three problems in the Trust Law concerning the liability for damages of breach of trust.Chapter 2 discusses the composition of the trustee's liability for damages.Section 1 discusses the source of the liability for damages,makes clear that the composition of the trustee's liability for damages under specific circumstances should be analyzed by returning to “breach of duty” rather than “breach of trust”,and summarizes the views on the nature of the trustee's liability for damages in theory.Section 2 discusses the duties of trustee which acts as the core of the constitutive requirements of trustee's liability of damage combined with the provisions of the trustee's liability of damage of the Trust Law,than analyzes difference between the other four provisions and Article 22 I of the Trust Law,which ought to be the general provision about the trustee's liability of damage.Chapter 3 discusses the consequences of breach of duty.Section 1 discusses the relationship between “restitution” and “money compensation” as a method of trustee damages from the provisions of Article 22 I of the Trust Law.Section 2 discusses Article 26 II of the Trust Law,the consequences of the breach of the duty of loyalty,which is about the trustee uses the trust property for his own benefit,and discusses the difference and connection between the consequence of disgorgement and the general liability for damages.Section 3 analyzes the method of taking the compensation of the lost interests of trust property into the scope of the trustee's liability for damages.Chapter 4 analyzes the problem of Article 22 I of the Trust Law which shall be the general provision of the trustee's liability of damage that provides both the right of revocation and the right to claim damages.Section 1 discusses the interpretation of Article 22 I of the Trust Law through the legislative background and the comparative law background.Section 2 discusses the relationship between revocation right and claim for damages set in Article 22 I of the Trust Law by analyzing the function of revocation right in trust law and clarifying the object of revocation.