AIB Group (UK) plc v Mark Redler & Co [2014] UKSC 58

In an important trusts case, the Supreme Court examined the principles of equitable compensation and its relationship with common law damages. The case arose from a breach of trust by solicitors acting for a bank in a property transaction. The question was whether the bank was entitled to compensation for the loss suffered rather than to have the whole sum paid away restored to it. The court confirmed that the liability of a trustee for breach of trust is not generally the same as liability in damages for tort or breach of contract. The rationale of the monetary remedy was to entitle a beneficiary to recover losses suffered by reason of the breach of duty. The loss in this case was found to be the proportion of the bank’s loan over which the solicitors had failed to obtain security. The measure of the solicitors’ liability was not fixed at the date of the breach of trust, and depended on a causal link between breach of trust and loss.