Trusts Law and Structural Power

In his seminal article 'Power, Property and the Law of Trusts', Roger Cotterrell cautions us that to engage in proper sociological critique of the law we must swim the deep and murky waters of society and the human condition. We cannot hope to fully understand the workings of the law without interrogating the social context in which law is placed. Cotterrell's critique of trusts was grounded in the idea of trusts law as a distancing framework which masked the true extent of beneficiaries' power, and seeks thereby to endow the trustee-beneficiary relationship with moral obligations of protection that are not, in fact, justified. Our paper uses Cotterrell's framework as a starting point, but offers a very different diagnosis. We argue that a proper appraisal of the strengths and limitations of trust law must start not with a narrow focus on property-based power, but with the broader issue of structural power. Structural power is concerned with mapping inherent inequities in society, the institutional structures that create those inequities, and their impact on the outcomes of social interaction. This dimension of power matters both because of its historical importance to trust law, and because equitable doctrines and remedies, unlike those of the common law, offer tools to directly address the consequences of structural power. Structural power, and structural inequities, offer a strong normative justification for the imposition of trust-based obligations; yet it is a peculiarity of modern trusts law that they are rarely imposed in such situations. From this perspective, the problem with trusts law lies not in the fact that it creates many moral obligations in favour of powerful beneficiaries, but that it fails to confer the right types of power on the right types of beneficiaries. The problem is not with the conceptual structures and obligations that characterise trusts law, but with the fact that trusts law suffers from a conceptual fossilization which prevents its application in contexts where its ideological underpinnings would most usefully redress the types of structural inequities with which they have the potential to deal. We develop this argument through three case studies, focusing on three specific aspects of this conceptual fossilization: the types of relations where trust-based obligations are appropriate, the types of interests and beneficiaries that merit protection through the instrument of trusts, and the types of obligations that must be imposed to adequately address the underlying problems of structural power. First, we argue that trusts doctrine, particularly in relation to implied trusts, fails to take adequate account of structural imbalances in interpersonal relations in modern society and, hence, leaves those areas to other domains of law such as contract or regulation which are less equipped to deal with them. We use as our example the control and use of information and personal data, focusing in particular on the issues created by the potential use by insurers of genetic information, and the use by internet services of control over information visibility to users, and information about the users themselves. In each case, we show that trust-based obligations offer strong ways of controlling the exercise of, and ameliorating the effects of, the structural power that characterises these relations. Second, we explore the manner in which trusts law conceptualises beneficiaries and the types of interests of beneficiaries that it protects. Using the local authority cases as our example, we show that the law presently embeds a narrow conception of beneficiaries, and of the interests of beneficiaries, which entrenches structural inequalities in society. In particular, there is a strong focus on money, at the expense of other types of value and interests, which leads to focus on a narrow category of beneficiaries (typically, ratepayers). A proper conception of beneficiaries, grounded in a proper understanding of the role of trusts in dealing with structural power, would in contrast recognise the possiblity of different classes of beneficiaries and of the possiblity of different obligations in relation to these different classes. The same is true of interests, where cases such as Harries v Church Commissioners and Martin v City of Edinburgh District Council, in contexts closely intertwined with the political process, lead to trusts law prioritising a particular ideological stance. Here, the consequence is to preclude trustees from being able to mediate between different interests of differing importance to different classes of beneficiaries conflicts, because the central concern is financial. Third, we consider the extent to which beneficiaries have the sort of power that Cotterrell suggests. Using the example of the pension trust---arguably a vehicle for social justice where the beneficiary should be strong and powerful---we show that the reality belies the claim. The state exercises power over both the trustees and the beneficiaries; the trustees have power over the beneficiaries; and the beneficiaries lack any practical power---not even having the ordinary rights given to the beneficiaries of small family trusts because of the impossibility of Saunders v Vautier collective action with such large numbers of beneficiaries. Pension trusts are accordingly susceptible to the whims of the political process and to the ideologies and thought-styles of those with the greatest amount of social power. In the case of pension trusts itself, the result has been a distancing effect from the beneficiaries, with the law prioritising the resilience of the trust fund over beneficiaries. This leaves beneficiaries in a state of abject dependance and powerlessness, with little or no ability to control those who ultimately determine their legal position. Here, the problem is not that the law justifies owing moral obligations to powerful beneficiaries, but that it justifies the absence of moral obligations to powerless beneficiaries. Our analysis thus illustrates dramatic inadequacies in the law of trusts as it is currently constituted, which are deeply embedded in the way trusts law has developed. The result is that whilst trusts law can be used to challenge and remedy imbalanced power relations, its distancing from structural imbalance is so deeply ingrained that it does not do so, and cannot change direction without significant intervention. We argue that there is a strong case for a greater focus on the role of structural power as a normative justification for trust-based obligations, and for studying the manner in which the current conceptual fossilization of trust law might be overcome, enabling it to move in the necessary direction.