Having now read the case (thanks Colin) I don't think I can endorse Josh's
view that the case contains nothing more than "speculative dicta" on the
question of whether a trustee may exclude liability for gross negligence.

So, the majority are forceful in their endorsement of the view of Millett
LJ in Armitage v Nurse, rejecting the view of Professor Matthews to the
contrary and the doubts of the Law Commisssion (see Lord Clarke at [57],
Lord Mance [106], Auld [122]). What the position of English law is was
necessary to determine for the outcome of this case because in relation to
the position prior to legislation in 1989 Guernsey law would have been
(and is) determined according to the position found in England (see Lord
Clarke at [45], Lord Mance [109]).

Lord Mance and Auld are agreeing in full with Lord Clarke and are giving
judgements out of deference to the fact that there are dissentients.

Lady Hale's reasons for dissent are summarised at [140]

"English law on the subject was not settled in 1988, I see no reason why
we should disagree with the Guernsey courts' conclusion as to how Guernsey
law would have decided the matter then."

This is odd. The judge's job is to authoritatively determine the question
of law before her. She is sitting to determine Guernsey law.

Auld states (at [127])

"What matters is what a pre-1991 Guernsey Court should have decided as a
matter of Guernsey law on a logical and otherwise legally correct process
of reasoning – an outcome that might also have required examination by the
Board at the time. It is an issue on which the present Board – given the
extensive material and submissions put before it – is as well placed as
the Lieutenant Bailiff and Court of Appeal, then or now, to determine."

I don't think that is quite right either.The law is not just a prediction
about how an earlier court would have decided the case. The only issue is
what the position of Guernsey law is in relation to breaches by a trustee
not covered by the legislation. The Privy Council is the ultimate Guernsey
court, its job is to state the law not predict what it or another court
would have done before 1989/91.

The disappointing aspect of the decision is, for me, the failure to
analyse whether as a matter of principle the trustee should be able to
exclude liability for gross negligence. The majority seem to me to content
themselves with the mechanical citation of authority without any further
analysis. So, I have some sympathy with Lord Kerr in dissent that the duty
of a fiduciary to subordinate his interests to those of his principal is
simply incompatible with his at the same time excluding liability for
gross negligence. However, the majority have endorsed Millett LJ's views
in Armitage v Nurse to the contrary, and I don't think that this can be
readily dismissed as a matter of authority.
--
Robert Stevens
Professor of Commercial Law
University College London