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Torts and Breach of Trust


Authored By- Anjali Chaudhary


Keywords: #breachoftrust #torts #damages #compensation

Abstract

Torts and Breach of trust, although are closely linked together, they have a thin layer between them that if looked at closely, would show that they are very much different in many ways. This article aims to talk about the differences in the two streams of one river called Torts, and Breach of Trust. In retrospect, one might say that Common Law helped resolve cases of higher importance, Breach of Trust laws also kept the British society of those times in check and helped deliver equity and justice to its people.

Introduction

A famous Jurisprudential Thinker in his book once said – “the distinction between Torts and Breach of Trust might be dismissed in very few sentences if one regarded trusts as a portion of the law so self-contained as to be easily detachable from the rest of the legal system”.

In simpler terms, one can say understand Tort as a breach of one’s rights resulting in civil liability, and Breach of Trust as a Trustee’s failure to discharge the duties imposed on him by terms of the trust.[i] A tort can be said to be a civil wrong that is not necessarily or exclusively a breach of trust or a breach of any other obligations based on equity. While on the other hand, a civil wrong that is a breach of trust cannot be a tort.

Torts and Breach of Trust: Defined

The most common example of differences between Torts and Breach of Trust can be – In the case of Breach of Trust, the Trustee has to pay damages/compensation, which is determined on basis of harm caused to the trust property. For eg., In a contractual obligation case, in case of Breach of Trust the damages are fixed, while in a Tort damages are not fixed.[ii]

Historical reasons are responsible for the distinction between Tort and Breach of Trust. In old days in Britain, the law of Tort seeded from the English Common Law, while Breach of Trust was developed by pronouncements of the Court of Equity or the Chancery Court. Primarily, in Tort, there was a violation of the English Common Law, while in Breach of Trust there was mainly a loss or damage to property, which was judged by the property law of that time, and the same came under the Chancery Court. Both Common Law Courts and Chancery Courts had no prior knowledge of matters that were being resolved in the other. They worked separately and Torts and Breach of Trust were two different laws that were dealt with differently.[iii]


There are a few other basic differences between tort and breach of trust. Such as that the duty for not committing a tortious act is fixed by law, while the duty for performance of duty in Breach of Trust such as the law of contract, is fixed/decided by parties to such contract. And that in torts, there is no privity between parties, while in breach of contract of trust there is privity between parties. That vicarious liability is a part of the law of torts, while not a part of a breach of trust. Also, a minor can be held liable in torts, while in breach of trust a minor’s contract is void ab initio. Also that in Tort a person has a duty towards other persons in a general sense, while in the law of contracts a person has duty towards a specific person. And therefore, it is safe to say that in Law of Torts there is Right in Rem, while in Breach of Trust there is Right in Personam.


It must be noted that Tort is not a codified law, Which means it is not governed by statutes but mostly by Judgements and Precedents. Another feature of a tort is that the motive of the doer is not relevant, and he is simply judged for the degree of wrongs in his action. Also, whether the plaintiff and defendant know or not know each other before the incidence of tortious liability is irrelevant to the matter. And finally, the legal remedy for liability in torts is unliquidated damages.[iv]


On the other hand, Breach of Trust and other such equity-based obligations are known to be criminal offenses and are usually liable for punishment with either imprisonment, or fine, or both of them. Another feature of Breach of Trust is that it is a codified law, and unlike Tort, the motive is a relevant element in Breach of Trust. Also, Breach of Trust and other similar obligations exclusively came within the jurisdiction of equity law and thus, equity courts. And the plaintiff and the defendant in cases of Breach of Trust know,or have known each other from the very beginning or for a long period. This law itself depends on the mutual trust they share. There are various remedies available to the affected party, such as Injunctions, payment of liquidated sums of money, and specific restitution of property, etc. Besides these remedies, the defendant can also be held liable to either pay fine, or suffer imprisonment, or both under the criminal proceedings for Breach of Trust.[v]

Conclusion

Breach of Trust and Law of Torts come from slightly different origins of the same legal system. As mentioned, both these laws were performing separate functions in separate court systems. The only basic similarity between Law of Tort and Breach of Trust is that both Tort and Breach of Trust are civil offenses/wrongs. Over the years, both these streams started closely. However, with time, both streamlined into different directions. Law of contract, which had originated from the law of breach of trust, is now one of the biggest role-players in the legal field, providing the current socio-economic system with a great legal remedy. While common law, also has found its way in democracies and commonwealth countries across the globe. Its contribution in forms of precedent-setting and various other such elements have given strength to judicial systems everywhere.

References-

[i]Collins Dicitonary of law, W.J. Stewart, 2006 [ii] Monika, What is a Tort? published April-24-2019 available at <https://blog.ipleaders.in/what-is-a-tort/> [iii] Difference between Contract and Tort, available at <https://shodhganga.inflibnet.ac.in/bitstream/10603/186021/8/08_chapter%203.pdf> [iv]William McEniry, Trusts: Personal Liability of Trustee for Torts, Vol. 31, Issue 2 September 1947, Marquette Law Review available at <https://scholarship.law.marquette.edu/cgi/viewcontent.cgi?referer=https://www.google.com/&httpsredir=1&article=3424&context=mulr> [v]https://houghtonlakeboard.org/difference-between-tort-and-breach-of-trust/

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