​Equity and Trust – Personal Remedies, Proprietary Remedies and Equitable Remedies


Introduction


In equity and trust law, courts provide different types of remedies depending on:

• the nature of the wrongdoing;

• the type of property involved;

• and the outcome sought by the claimant.

Three of the most important concepts are:

• personal remedies;

• proprietary remedies;

• and equitable remedies.

These concepts are closely related but they are not identical. Understanding the distinction is extremely important in areas such as:

• breach of trust;

• equitable tracing;

• fiduciary duties;

• contracts;

• insolvency;

• and unjust enrichment.

⸻


Equitable Remedies


Definition


Equitable remedies are remedies granted by courts of equity.


They are:


✅ discretionary remedies,


meaning the court is not automatically required to grant them even if the claimant succeeds.


This differs from many common law remedies, such as ordinary damages, which usually follow automatically once liability is established.


⸻


Characteristics of Equitable Remedies


Equitable remedies are generally:

• flexible;

• discretionary;

• fairness-based;

• and guided by equitable principles and maxims.

⸻


Examples of Equitable Remedies


Equitable remedies include:

• injunctions;

• specific performance;

• rescission;

• rectification;

• equitable compensation;

• account of profits;

• constructive trusts;

• equitable liens;

• subrogation;

• and tracing remedies.

⸻


Example


Suppose Daniel breaches a trust by taking trust money.


The court may grant:

• equitable compensation;

• tracing remedies;

• or a constructive trust.

These are all:


✅ equitable remedies.


⸻


Personal Remedies


Definition


A personal remedy operates:


✅ against a person personally.


The defendant becomes personally liable to pay money or perform an obligation.


The remedy does not attach directly to specific property.


⸻


Main Feature


Personal remedies create:


✅ personal liability only.


The claimant merely becomes a creditor of the defendant.


⸻


Example


Suppose Daniel wrongfully removes:


£200,000


from a trust and spends all the money on holidays.


The money is gone and cannot be traced.


The beneficiaries may sue Daniel personally for:


✅ equitable compensation.


⸻


Result


Daniel personally owes:


£200,000


to the beneficiaries.


However:


❌ the beneficiaries do not obtain rights over any specific asset.


⸻


Examples of Personal Remedies


Personal remedies include:

• equitable compensation;

• account of profits;

• damages;

• dishonest assistance;

• and knowing receipt compensation.

⸻


Advantages of Personal Remedies


Personal remedies are useful because they may still operate even where:

• property has disappeared;

• tracing fails;

• or assets are dissipated.

⸻


Disadvantages of Personal Remedies


The major disadvantage is insolvency.


If the defendant becomes bankrupt:


❌ the claimant becomes an unsecured creditor.


The claimant may recover little or nothing.


⸻


Proprietary Remedies


Definition


A proprietary remedy gives the claimant:


✅ rights over specific property.


The claimant asserts ownership rights or security interests directly against the asset itself.


⸻


Main Feature


The remedy attaches:


✅ to property,
not merely to the defendant personally.


⸻


Example


Suppose Daniel wrongfully takes:


£200,000


from the trust and buys shares.


The beneficiaries may trace into:


✅ the shares.


The beneficiaries may claim:

• ownership of the shares;

• a proportional share;

• or an equitable lien.

⸻


Result


The beneficiaries obtain:


✅ proprietary rights over the asset itself.


⸻


Examples of Proprietary Remedies


Proprietary remedies include:

• tracing;

• constructive trusts;

• equitable liens;

• equitable charges;

• subrogation;

• and proprietary injunctions.

⸻


Advantages of Proprietary Remedies


Proprietary remedies are generally considered stronger because they:

• survive insolvency;

• provide priority over unsecured creditors;

• attach directly to property;

• and allow claimants to benefit from increases in value.

⸻


Example of Increase in Value


Suppose trust money of:


£200,000


is used to buy shares later worth:


£2 million.


If the beneficiaries obtain:


✅ a proprietary share,


they may recover far more than the original £200,000.


⸻


Insolvency Advantage


Suppose Daniel becomes bankrupt.


⸻


Personal Remedy


The beneficiaries become:


❌ unsecured creditors.


⸻


Proprietary Remedy


If beneficiaries possess a proprietary interest in the shares:


✅ they recover directly from the asset itself.


They therefore rank ahead of ordinary creditors.


⸻


Difference Between Personal and Proprietary Remedies


Personal Remedy

• against the defendant personally;

• creates debt liability;

• no ownership rights over assets.

⸻


Proprietary Remedy

• against specific property;

• creates proprietary rights;

• survives insolvency;

• may include appreciation in value.

⸻


Relationship Between Equitable and Proprietary Remedies


Not all equitable remedies are proprietary.


Some equitable remedies are:


✅ personal remedies.


⸻


Example


Equitable Compensation


This is:

• equitable;

• but personal.

⸻


Example


Constructive Trust


This is:

• equitable;

• and proprietary.

⸻


Therefore


Equitable remedies form the broader category.


Inside equity there are:

• personal equitable remedies;

    and

• proprietary equitable remedies.

⸻


Example Comparing All Three


Suppose Daniel steals:


£100,000


from a trust.


⸻


Scenario 1 – Money Dissipated


Daniel spends everything on holidays.


The beneficiaries may claim:


✅ equitable compensation.


This is:

• equitable;

• and personal.

⸻


Scenario 2 – Money Used to Buy Shares


Daniel buys shares now worth:


£500,000.


The beneficiaries may claim:


✅ a constructive trust over the shares.


This is:

• equitable;

• and proprietary.

⸻


Scenario 3 – Equitable Lien


The beneficiaries seek:


✅ an equitable lien securing repayment.


This is also:

• equitable;

• and proprietary.

⸻


Why the Distinction Matters


The distinction is extremely important in:

• insolvency;

• asset recovery;

• tracing;

• fiduciary breaches;

• and fraud litigation.

Claimants usually prefer proprietary remedies because they provide:

• stronger protection;

• priority rights;

• and access to appreciating assets.

⸻


Key SQE Principles


Equitable Remedy


A remedy granted by equity and subject to judicial discretion.


⸻


Personal Remedy


Operates against the defendant personally.


⸻


Proprietary Remedy


Attaches directly to identifiable property.


⸻


Conclusion


Equitable remedies are discretionary remedies developed by courts of equity to achieve fairness and justice. Within equity, remedies may operate either personally or proprietarily. Personal remedies impose liability upon the defendant personally, while proprietary remedies grant rights directly over specific property. Proprietary remedies are generally more powerful because they survive insolvency, provide priority over creditors, and allow claimants to benefit from increases in asset value. The distinction between these remedies lies at the heart of modern equity, trust law, tracing, and fiduciary accountability.


Sources of Reference


Foskett v McKeown [2001] 1 AC 102 (HL).


Re Hallett’s Estate (1880) 13 Ch D 696 (CA).


Westdeutsche Landesbank Girozentrale v Islington LBC [1996] AC 669 (HL).


Target Holdings Ltd v Redferns [1996] AC 421 (HL).


Alastair Hudson, Equity and Trusts (11th edn, Routledge 2022).


James Penner, The Law of Trusts (12th edn, OUP 2020).


Graham Virgo, The Principles of Equity and Trusts (5th edn, OUP 2024).


John McGhee (ed), Snell’s Equity (35th edn, Sweet & Maxwell 2024).