22 September, 2019

Quora Answer: Can an Attorney Represent Trustee & Beneficiary at the Same Time?

The following is my answer to a Quora question: “Can an attorney represent a trustee and a beneficiary at the same time?”

Depending on the nature of the work, dual representation is conceivable.  In most cases, it is a conflict of interest.  The trustee and the beneficiary have different needs and interests by design.  Considering the contentions that could arise, it is not recommended.

Rule 20 of the Legal Profession (Professional Conduct) Rules 2015 governs conflict, or potential conflict, between the interests of two or more clients.  A lawyer acting for both a trustee and a beneficiary is acting for two clients whose interests are structurally opposed the moment a dispute arises.  A trustee’s duty is to preserve and properly administer trust assets according to the trust deed.  A beneficiary’s interest is in receiving the maximum benefit the trust can lawfully provide, on the timeline that suits him.  These interests align only while nothing is contested.  The moment a beneficiary questions a distribution, an investment decision, or the trustee’s own fees, the same lawyer cannot advise both sides.

An Analogous Precedent

The Court of Three Judges addressed a structurally identical conflict in a case involving a lawyer representing both a foreign worker and his employer in charges under the Employment of Foreign Manpower Act.  The lawyer had preferred the employer’s interest over the worker’s, failing to put forward the worker’s own account to the Attorney-General’s Chambers.  The Court found this a breach of the lawyer’s duty of “unflinching and undivided loyalty” to each client.  A trustee and a beneficiary present the identical structural problem.  One client’s advocate cannot simultaneously advocate for the other client without eventually favouring one over the other, whether deliberately or otherwise.

Chief Justice Sundaresh Menon, in the case against solicitor Malcolm Tan Chun Chuen, warned that it is “inadvisable for solicitors to enter into business transactions with their clients since this will often have a real potential to give rise to a conflict of interest.”  The Court described the underlying conduct as “disgraceful and appalling,” specifically because the solicitor used his professional status to offer assurances he could not honestly make while his own interests sat on the other side of the transaction.  Representing a trustee and a beneficiary at once carries the same structural risk the Chief Justice described: a lawyer positioned to reassure one party while his advice necessarily serves the interests of another.

This Matters More for Irrevocable and Testamentary Trusts

An irrevocable trust cannot be amended or revoked once established, which means any dispute over its administration has no quiet, informal fix.  A beneficiary who feels short-changed has only the courts, or the trustee’s own goodwill, to turn to.  A lawyer acting for both parties in that structure is not managing a minor tension.  He is managing a dispute with no off-ramp, where his own conflicted position could later be challenged in the very court proceedings the dispute produces.

A testamentary trust, created under a will and arising only on death, adds a further layer.  The executor administering the estate, and the trustee managing the trust the will establishes, may be the same person, and beneficiaries frequently include family members with long, complicated histories of resentment predating the death itself.  A lawyer engaged early to draft the will, then retained to advise the trustee after death, must take particular care not to drift into advising individual beneficiaries on the side, however informally, since that drift is the scenario Rule 20 exists to prevent.

Singapore’s professional conduct rules, and the case law interpreting them, treat this dual representation as a risk.  A lawyer can, in narrow, specific circumstances, assist both a trustee and a beneficiary where their interests align, and no dispute exists.  The moment any friction appears – and friction is common in irrevocable and testamentary trusts because neither structure offers an easy exit – that same lawyer must withdraw from one side or the other.


Terence Nunis | Executive Chairman, Equinox Zenith | Author, The 1% Playbook: The Billionaire Cheat Code



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