Explaining Constructive Trusts

The rules of constructive trusts form a controversial area of the modern English law of trusts. This reappraisal of this area of the law covers topical theses about them, and points to significant reforms which could be implemented.

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The rules on constructive trusts form one of the most topical and controversial areas of the modern English law of trusts. There are two theses about the rules. One, inspired by the North American experience, is that the rules should be regarded as instruments of restitution. The other is that the rules are confused and capricious. In this reappraisal of the area, these two topical theses are rejected and a fresh approach advanced. The third thesis is that the rules should be regarded as instruments for the rational furtherance of three coherent aims, firstly that one who has made a disposition in favour of another person should uphold the disposition. Secondly that one who has gained through another's loss should give up the gain to the other, and thirdly that one who has caused loss to another should repair the loss. These three aims convicingly account for many, and point to compelling reforms of several other, significant features of the rules.