Xiaotao Zhang (China University of Political Science and Law) & Jeremy Hui Jing (The University of Hong Kong) have posted Defining Trustee Liability in Chinese Law, European Business Organization Law Review (forthcoming 2026), on SSRN. Here is the abstract:
This article examines the ambiguity and inconsistency surrounding trustee liabilities in Chinese law, with a particular focus on the scope of a trustee’s liability in transactions involving trust assets. It highlights the absence of explicit statutory provisions, resulting in uncertainties that undermine the effectiveness and attractiveness of trust structures in both commercial and private contexts. Through comparative analysis, the article argues that the English unitary model of trustee liability is ill-suited to the Chinese context, given China’s professionalised trust industry, trust registration requirements, and legislative emphasis on transparency and transactional certainty. Instead, it advocates the adoption of a division approach, whereby trustees’ liability is generally limited to trust assets except in cases of misconduct or wrongdoing. The final section proposes an analytical framework centred on three key factors: the nature of trustee conduct, the transparency of trust arrangements, and the mutual agreement of transaction parties. It contends that it is the combined and interactive effect of these factors that should determine the scope of a trustee’s liability.
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