The Rule in Saunders v. Vautier and the Czech Trust Law

Abstract

The Saunders v Vautier principle is one of the most fundamental principles of English trust law. Several scholars have addressed the prudence of civil law countries incorporating this principle when adopting trust-like instruments. More importantly for the Czech Republic, some remarks on this issue have been made in Québec - the jurisdiction which, to an extent, served as an inspiration for the Czech legislator when drafting the Czech trust-like instrument. Unfortunately, the debate on the topic is almost non-existent in the Czech Republic. This article discusses whether, as a result of the principle of Saunders v Vautier, the beneficiaries of the Czech trust-like instrument have similar rights to those of the beneficiaries of the English trust. It is suggested that it is not only civil law countries, but also some common law countries, that do not fully respect this principle. Therefore, there clearly exists a diversity of opinion regarding the question of whether beneficiaries should or should not have rights that prevail over the intentions of the settlor. This article focuses on supporting this principle and, in this light, puts forward a number of justifications for its incorporation.