Is there room for the trust in a civil law system? The French and Italian perspective.

“The small family of mixed legal systems, which draw upon both common and civil law traditions, provides us with an interesting perspective for the purpose of comparative trust law. When faced with an assertion that there is no place for the trust in civil law, how does one explain the existence of the trust in these mixed jurisdictions? Surely, if these systems are able to accommodate the trust, civil law jurisdictions should, in principle, also be able to do so.

In this paper I shall, through the examination of two civil law jurisdictions – France and Italy, argue that there is room for the trust to be translated – not transplanted – into existing civil law institutions and practice. The extent to which this is the case and the most appropriate model for this introduction will be dependent on the dogmatic context of each such jurisdiction.

To do so I shall first seek a definition and determine the features of the ‘trust’ in comparative law terms, and outline the obstacles which must be surmounted in order to accommodate it into the civil law tradition (1). I shall then examine the French fiducie, a sui generis institution, which, whilst formed contractually, has significant trust-like structural features (2). Finally, I shall look at how Italy has set in motion a process which has seen the interplay between national law and foreign law transform trusts and has developed a thriving practice of ‘internal’ trusts (3). ”

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I) Conceptual background

A) What is a trust
B) Common obstacles to the reception of the trust concept in civil law jurisdictions

II) France

A) Between contract and trust: the fiducie – a hybrid institution
B) The fiducie and the Hague Convention: a bridge towards the trust?

II) Italy

A) Domestic trusts under the Hague Convention
B) The reception of the internal trust: a dialectic approach


Concluding thoughts:

“The English model trust presents unique functional and structural features, and, as we have seen, it is extremely hard to rival its flexibility in “one single comprehensive package”. Yet the blunt assertion that the trust is alien to civil law does not withstand scrutiny. If one is to adopt a core comparative definition of trusts centered around asset segregation, then it must be said that trusts are to be found in civil law.

Indeed, the two jurisdictions which we have looked at clearly illustrate that there is room for trusts in civil law, although how these are introduced and the extent of their functional similarity with the English trust will vary depending on the cultural, historical and political background of each jurisdiction.  […]

Whilst Italy lacks a domestic trust law, it has taken advantage of the Hague Convention to develop a thriving local practice of using foreign law for Italian trusts. This effort, spearheaded by both doctrinal and jurisprudential support, has allowed the development of a consistent framework and the surmounting of the obstacles inherent in the civil law tradition. As a result of this process initiated nearly twenty years ago, these trusts can no longer be said to be ‘foreign’. A more accurate term would be ‘domesticated’ due to the distinctive features they have developed.

Whereas France has its fiducie, a sui generis institution introduced in 2007, which is structurally a trust in comparative law terms, it is, nonetheless, functionally neutered. Trusts can be based on civil institutions, as the examples of Panama and Quebec show, and it is to be hoped that the French fiducie represents such a first step and will, one day, play a similar role. In any case, recent reforms which have increased its flexibility both structurally and functionally are to be welcomed. In particular the decision, albeit unsuccessful, of the French legislature to introduce a concept of ‘economic ownership’ goes to show just how much the lines are blurring between civilian and common law traditions.

It should now be clear that one should not expect trusts to be transplanted wholesale into civil law but one may instead wish to see them translated and interplay with civil law institutions and practice. These two jurisdictions show us radically different models for the introduction of the trust into civil law systems. One may only hope that states will heed the call of the European Parliament, which in October 2001 called for a harmonisation of the laws of Member States – including in the area of trusts. Yet in doing so, one must not lose sight of the context in which trusts operate and one must be mindful of the fact that, as an eminent scholar concludes, the trust “…alters the balance of power between the state and the individual”.

– References omitted, see full PDF version