[gethsemane342]

Hello. Essentially, I have muddled myself up entirely on the different remedies for breach of trust (personal, against the trustee). As far as I can work out:

You falsify when the trustee makes an unauthorised investment. This is not related to causation as such, you just make it so the investment never happened.

You surcharge when the investment was authorised but made in a breach of the duty of care. This is putting the trust to where it should have been had you not breached your duty. You're only liable for the direct loss caused (on a but for causation)

And I cannot, for the life of me, work out where equitable compensation fits in. All the books, and Target Holdings, just mention it as though I should have always known it. What is equitable compensation anyway?

Anyone who can explain this to me will have my undying love and admiration for evermore...

[Forum User]

I think 'equitable compensation' is just an umbrella term to describe all the monetary remedies in equity that are concerned with reimbursing the innocent parties' loss rather than removing the breaching parties' gain (i.e. a constructive trust or an action for profits are not 'equitable compensation'). That at least was the impression I got from reading the cases, couldn't find a definition either.

[gethsemane342]

(Original post by Forum User)
I think 'equitable compensation' is just an umbrella term to describe all the monetary remedies in equity that are concerned with reimbursing the innocent parties' loss rather than removing the breaching parties' gain (i.e. a constructive trust or an action for profits are not 'equitable compensation'). That at least was the impression I got from reading the cases, couldn't find a definition either.

See, I thought that, but Chambers, in Liability (in Birks and Pretto's book) makes a point of saying how accounting is the main remedy and compensation is the secondary one. But the cases themselves don't explain this distinction and the closest I could find to it was Moffat's book which mentions that Target Holdings uses the wrong terminology.

[mja]

(Original post by gethsemane342)
See, I thought that, but Chambers, in Liability (in Birks and Pretto's book) makes a point of saying how accounting is the main remedy and compensation is the secondary one. But the cases themselves don't explain this distinction and the closest I could find to it was Moffat's book which mentions that Target Holdings uses the wrong terminology.

Equitable compensation is a term often misused. Its core meaning now seems to be compensation paid to the trust fund or beneficiaries in a situation where the beneficiaries are entitled to be compensated for their loss, but where that loss is not reflected in a loss to the trust fund, such that the usual accounting mechanism wouldn't help.

An example would be where a trustee's failure, in breach of the duty of care, to pay a sum to a beneficiary at a particular time causes that beneficiary to suffer a loss which is individual to that beneficiary. The beneficiary has a claim against the trustee, but the trust fund itself contains the correct amount - the claim is for equitable compensation against the trustee.

[gethsemane342]

(Original post by mja)
Equitable compensation is a term often misused. Its core meaning now seems to be compensation paid to the trust fund or beneficiaries in a situation where the beneficiaries are entitled to be compensated for their loss, but where that loss is not reflected in a loss to the trust fund, such that the usual accounting mechanism wouldn't help.

An example would be where a trustee's failure, in breach of the duty of care, to pay a sum to a beneficiary at a particular time causes that beneficiary to suffer a loss which is individual to that beneficiary. The beneficiary has a claim against the trustee, but the trust fund itself contains the correct amount - the claim is for equitable compensation against the trustee.

I see, so it's quite narrow. I've just discovered it comes up in fiduciaries as well but I think I understand it better there. Thanks a lot! You have my undying love and admiration. Also, I've repped you ^_^

[mja]

(Original post by gethsemane342)
I see, so it's quite narrow. I've just discovered it comes up in fiduciaries as well but I think I understand it better there. Thanks a lot! You have my undying love and admiration. Also, I've repped you ^_^

Always happy to help a fellow Christ's lawyer!