Trust Disputes
The arbitration or mediation of trust disputes can help parties to avoid publicly litigating their dispute in the courts. Litigation is not only an expensive option for disputing parties but is likely to allow the disclosure of matters which are inherently personal to the parties. This can include personal information as well as financial and other commercial matters which would otherwise remain confidential.
Trusts, a common method of asset protection and estate planning in New Zealand, involve multiple parties, including trustees and beneficiaries. Trustees hold legal ownership of the trust assets and must manage them in the best interests of the beneficiaries.
Embedded within a trust is a trust deed, an agreement among the parties that outlines the terms and conditions of the trust. Typically, this agreement requires trustees to act in the best interest of the beneficiaries and may require them to obtain approval for significant decisions. Explore further to see how our expertise in this area can assist in effectively managing and resolving your Trust disputes.
The three options available are Arbitration, Mediation, and a hybrid process – Arb-Med.
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Overview
NZDRC is well placed to ensure that parties to trust disputes have access to the most robust, effective and efficient service.
Trusts Act 2019
The Trusts Act 2019 brought several significant changes to trust law including express provision for ADR processes.
Process options
The three most commonly used options for trust disputes are arbitration, mediation, and a hybrid process – arb-med.
FAQ
Explore our FAQ section for quick insights and to find answers to common questions.
Overview
NZDRC provides expert arbitration and mediation services for Trust disputes. In New Zealand, Trusts are commonly used for asset protection and estate planning, and these can often involve complex agreements and disputes. Our professional arbitration and mediation services are specifically tailored to navigate these complexities, guiding you towards a resolution.
We place great importance on effective and efficient dispute resolution processes. Our services cater to various needs, whether you prefer arbitration to avoid court proceedings or mediation to preserve relationships. Our robust and efficient service ensures the best outcomes for parties dealing with Trust disputes. With a high success rate and a reputation for cultivating positive outcomes, NZDRC is a trusted choice for dispute resolution.
Trusts Act 2019
The Trusts Act 2019 (Act) came into force on 30 January 2021. It brought several significant changes to trust law and was the first major reform in 70 years. The Act applies to existing and future family trusts, trading trusts and trusts created under wills.
One of the most significant developments in the Act is the express provision for ADR processes to resolve internal (between trustees and/or beneficiaries) and external trust disputes involving a trustee and one or more third parties.
An ADR process is defined in the Act as an alternative dispute resolution process (for example, mediation or arbitration) designed to facilitate the resolution of a matter. Prior to the Act, it was generally considered that disputes relating to trusts were not capable of resolution through mediation or arbitration because many beneficiaries of trusts were discretionary, unascertained, or lacking capacity and therefore their interests could not be safeguarded or considered.
In sum, the move to expressly provide for and promote the use of ADR in the Act has been a watershed moment by global standards.
Process options
The primary processes for trust disputes are arbitration, mediation, or arb-med.
Arbitration is a legal process in which an arbitrator makes a binding decision on the dispute. The parties can choose the specific procedural rules for their arbitration. In particular, the NZDRC’s ECA45 Arbitration Rules are often chosen for these types of disputes, as they provide a fast, cost-effective solution. Under these rules, parties present their submissions and evidence in writing, with no need for a hearing, which results in significant time and cost savings. To move forward with this fixed fee service, parties must agree to arbitrate under the NZDRC ECA45 Arbitration Rules. Our Registry team is available to assist with the completion of an Agreement to Arbitrate or to provide information on our alternative arbitration process options.
Mediation, on the other hand, is a consensual, informal negotiation process where a skilled, independent mediator assists the parties in negotiating a mutually acceptable settlement. This settlement need not conform strictly to legal rights or community standards, but rather meets the parties’ unique interests and needs. Parties wishing to employ this process need to agree to mediate under the NZDRC Mediation Rules. Our Registry team is ready to assist with an Agreement to Mediate.
Lastly, there is the Arb-Med procedure, a combination of both arbitration and mediation where the dispute resolution practitioner starts as an arbitrator and then, with the consent of the parties, changes to a mediator role to help the parties reach a mutual agreement. If the mediation does not result in a settlement, the practitioner returns to the arbitrator role and makes a binding decision based on the information presented during the arbitration phase.
Contact our Registry team who can help you get underway with an agreement to engage in your process of choice.
FAQ
Find quick insights and helpful information on a variety of topics related to trust disputes
Why choose NZDRC?
NZDRC offers fully administered dispute resolution processes.
We operate as a private registry, providing one point of reference for parties and their representatives, assisting with the appointment of dispute resolution practitioners, and the management and administration of private dispute resolution processes across a wide variety of sectors and industries in New Zealand.
Our services include a dedicated registrar and a peer-review process. These allow for better management of the case and improvements in the quality of the decision.
When should I choose arbitration over mediation, or mediation over arbitration?
You should choose arbitration over mediation when you want a definitive, legally binding outcome. Arbitration is also advisable when the parties have a high level of conflict or are unwilling or unable to negotiate with each other directly.
Mediation is a good choice when both parties are willing to work together to resolve their dispute and are open to compromise. It is also suitable when preserving the relationship between the parties is important, as the mediation process is less adversarial than arbitration.
How enforceable are the outcomes of private dispute resolution processes?
Arbitration awards are enforceable both domestically under the Arbitration Act 1996 and internationally under the New York Convention. Enforcement may only be refused in very rare cases making arbitration a popular means of obtaining final resolution of a dispute.
Mediated settlement agreements, adjudication determinations and expert determinations are enforceable as a matter of contract.
What are the benefits of resolving trust disputes outside of the court system?
When trust disputes are resolved through processes provided for by NZDRC, parties often see lower costs, faster resolution, friendlier engagement and higher respect for privacy. This is especially important for trusts, which so often involve family matters.
These reasons formed part of the Law Commission’s basis for its recommendations prior to the enactment of the Trusts Act 2019.
How is confidentiality maintained throughout the process?
Confidentiality in private dispute resolution processes such as arbitration and mediation is maintained through a combination of statutory provisions, contractual obligations, and NZDRC’s institutional rules.
Hearings and mediations are conducted in private, with no public access to the proceedings or the evidence and submissions presented.
While absolute confidentiality is never guaranteed, measures taken by NZDRC aim to create a robust framework for maintaining confidentiality in line with party expectations for private dispute resolution.
Take the first step towards resolving your trust dispute today
At NZDRC, we understand that trust disputes can be complex and sensitive. Our expert team is committed to providing a confidential, respectful and professional environment in which these disputes can be resolved. We offer a range of services including arbitration and mediation, with a focus on reaching a resolution that meets the unique needs and interests of all parties involved.
Contact us today to find out more about how we can help you or your clients.
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