The establishment and servicing of trusts has been a mainstay of Cayman’s financial services industry since it first developed back in the Sixties and Seventies. In recent years this jurisdiction has added to its repertoire of trust services by developing a niche for itself in the field of trust dispute resolution. Attorney Morven McMillan had been a stalwart of the industry earlier this decade, as a senior associate in the Litigation and International Trusts & Private Client teams at Walkers, but moved to London-based attorneys Charles Russell LLP in 2006 as an associate, going on to becoming a partner and Head of the Trusts & Fiduciary Disputes team there.
Now she is back, looking forward to developing her trust practice with her new employers, Mourant Ozannes.
“As well as maintaining family links here I ensured that business links were also upheld while I worked in the UK,” she says. “I’m really excited to be back in Cayman and look forward to the opportunities for development of the trust practice here. I am also delighted to be working with such a welcoming group of people.”
Cayman well positioned for growth
The development of trusts is a constantly changing process, keeping up with changes in public policies and the rapid development of investment strategies.
“The great thing about trusts is their flexibility,” McMillan notes. “They are adept at changing along with the developing financial environment. At the same time there are always a myriad of opportunities to produce new products and we, in the Cayman Islands, are well poised to take advantage.”
McMillan points out Cayman’s well established infrastructure as a reason why it is so well positioned within the field of trusts and says that there is a great body of trust professionals lending their expertise here to the industry. That said, she sees a contraction of the market as a response to recent economic conditions. Even so, she says Cayman has been able to retain its critical mass to ensure that the trust business remains strong.
Expectations versus reality
McMillan says that having a sound grasp of the advisory side of the trust business provides a good grounding for the litigation side of the business.
“The two complement each other because when you are acting in an advisory capacity you are always trying to keep an eye on the risk side,” she states.
Cayman has been at the cutting edge of the developments in trusts law for a number of years now. This has come about to some degree, McMillan says, because tensions arise in trusts, which may have been established many years ago, sometimes due to generational differences.
“We find that there are differences in attitude between the generations, with regard to what one party may consider their entitlement and the increased sophistication of everyone involved particularly with regard to investments,” she explains. “These issues often come down to a blockage in the flow of information.”
Understanding the expectations of beneficiaries is a key part of the expertise shown by trust managers but in some cases these expectations are not met and litigation occurs.
“Often the misunderstanding is driven by beneficiaries who demand the disclosure of documents or information that are confidential or commercially sensitive,” she informs.
“For example the documents might be private and completely unrelated to the beneficiary concerned or perhaps they might disclose the intentions of a business and be market sensitive. Sometimes this is difficult to explain to the beneficiary and litigation can occur.”
The benefits of a global reach
McMillan, who is a member of the Society of Trusts and Estates Practitioners (STEP) and the Association of Contentious Trusts & Probate Disputes (ACTAPS), says trust business often comes from the trustees of Cayman-domiciled trusts and sometimes come from the beneficiaries who have been advised to take legal advice from practitioners in this jurisdiction. Thus the global reach of her new firm (Mourant Ozannes is located in Cayman, Jersey, Guernsey and London) gives a huge boost to the development of the company’s trust business.
“Not only is our client base international but so are trust practitioners themselves,” she confirms. “We rely on our own offices as well as a network of contacts in other countries, to ensure that our own reach is well and truly global.”