A leading Caribbean judge has launched a staunch defence of trusts, fuelling expectations that there will be an unprecedented stand-off between offshore and onshore judges over the landmark Charman v Charman divorce ruling.

In a keynote speech at the Legal Week Trust & Estates Litigation Forum, Mr Justice Smellie (pictured right), chief justice of the Cayman Islands, railed against what he described as the "entirely misguided" criticism of offshore trusts by onshore authorities.

"In over 55 years of reporting from the Cayman Islands, there has not yet been a single reported decision in which the court declared a Cayman Islands trust to be a sham," he told the conference, which took place in Provence, France, from 28 February to 1 March.

His speech sets the scene for the next stage in the epic Charman v Charman divorce battle, which resulted in a record £48m award for Beverley Charman after Mr Justice Coleridge ruled that assets held in a Bermudian trust that was created by John Charman should be taken account of in the settlement.

This spring, Beverley Charman, who is being represented by Manches, is scheduled to ask the Bermudan courts to 'give effect' to the judgment so that a portion of the trust's assets can be handed over to her.

In a number of similar cases involving Jersey trusts, Jersey's Royal Court has sided with the Family Division. But Smellie's speech has fuelled expectations among trust lawyers that the Caribbean offshore jurisdictions will take a tougher line.

Simon Weil, head of individuals at Bircham Dyson Bell, accused the High Court's family judges of riding roughshod over offshore trusts.

He added: "When it comes to jurisdictions like Cayman we were given some hope that they would be slightly more robust in their resistance."

But Robert Ham QC, of Wilberforce Chambers, defended the Family Division's judges. He said: "I think if you have got the English court looking after the matrimonial affairs, the offshore jurisdiction ought to fall into place."

Legal Week will carry a full report on the Legal Week Trust & Estates Forum on 3 April.

2008 Legal Week Trusts & Estates Litigation Forum