International business is the primary area of economic activity in Bermuda, as a result of not just a favourable tax regime, but also because of its political and legal stability, regulatory framework, proximity to New York (2-hour flight) and London (7-hour flight), talented work force, and natural beauty.



Bermuda is a leading hub to insurance and reinsurance, banking, and financial services industries; for many years it has been a premier jurisdiction for trusts, family offices and other private client structures. The latest available employment data demonstrates job growth within relevant occupational groups: Directors and Chief Executives (+ 111 jobs), Actuaries (+ 44 jobs), Lawyers (+ 24 jobs), Business Analysts (+ 23 jobs).

Bermuda also has a strong tourism industry. Tourism numbers rebounded after the lifting of Covid-19 restrictions; there is a busy cruise ship schedule during the warmer months, and the amount of air lift has increased. Investors are showing confidence in Bermuda's tourism market – they benefit from specific legislation that ensures new hotel developments are subject to tax incentives and other forms of relief. In October 2023, the Minister of Home Affairs approved the re-development of the Fairmount Southampton Hotel, which has been closed since 2020, paving the way for a revamp of the hotel and construction of up to 250 additional tourism and residential units. It has been reported that the project will deliver an economic benefit of USD1.4 billion to the local economy.

Bermuda's closest economic ties are with the US, the UK and Europe. Accordingly, Bermuda has not been immune to macroeconomic factors such as inflationary pressures, international conflicts and global minimum tax provisions. In early 2023, the rate of inflation reached a 15-year high, leading banks to increase interest rates (following a similar announcement by the US Federal Reserve). In October 2023, the Bermuda government released an outline of its proposed 15% corporate tax regime as part of a public consultation process and in response to OECD global minimum tax rules. The corporate income tax is expected to be enacted prior to 31 December 2023, and be effective for tax years beginning on or after 1 January 2025. The proposed tax represents a fundamental shift in how large multinational groups with a Bermuda presence are taxed.


There is no new legislation from 2023 which represents a significant change for clients litigating in Bermuda. However, a number of legislative changes have recently been proposed by Bermuda's Restructuring & Insolvency Specialist Association (RISA), including those listed below. It will be interesting to see how much traction these proposals receive over the next 12 months.

  1. Court Appointed Restructuring Officers (ie, the creation of a Restructuring Officer regime akin to that introduced by the Cayman Islands in 2022). Bermuda companies are often restructured via the appointment of provisional liquidators with powers enabling them to assist management with the restructuring. RISA's proposal is made, in part, to eliminate the mistaken perception that a company is being 'liquidated' by provisional liquidators, rather than undergoing a restructuring process.
  2. Reducing the thresholds for Schemes of Arrangement which is an alternative means of restructuring a Bermuda company that requires approval by a prescribed majority of creditors/shareholders; and
  3. Conferring upon the Bermuda court a statutory power to wind-up foreign companies, provided they have sufficient ties to Bermuda. This proposal is designed to eliminate the potential harm caused by a foreign domiciled company, being currently outside the scope of the winding-up regime, continuing operations in Bermuda notwithstanding that it is insolvent or that another ground for making a winding-up order applies.


While the court system embraced the use of technology during Covid – particularly the use of remote hearings – the Bermuda courts have, since September 2022, reverted to in-person hearings in most cases. In the event that a party wishes to have a remote hearing, it needs to make an application to the relevant Judge. We believe that Judges are receptive to requests for remote hearings in appropriate cases; the use of remote hearings in procedural hearings concerning timetabling and appearances etc leads to efficiencies in terms of costs and speed. It also facilitates participation by client representatives, and members of the legal team, who are located overseas. This is relevant given the international element of many cases that come before the courts.

In our experience, remote hearings continue to be popular in the context of arbitrations and mediations. This is not very surprising as, currently, Bermuda does not have a dedicated arbitration/dispute resolution centre; the Bermuda government has announced plans to build an arbitration centre in the City of Hamilton, one block from the commercial court, but construction has not yet begun. Arbitrations, and mediations, tend to take place in conference rooms at law offices or hotels adding to costs.

Returning to the courts, the commercial court has established a formal consultative structure with its users, to ensure the commercial court is aware of the evolving needs of its users, and can consider changes to meet those needs. The roll-out of the Commercial Court Users committee was delayed by the Covid pandemic, but the first consultation occurred in 2023. Looking ahead, it is expected that the Bermuda courts will soon adopt an electronic Case Management System, enabling parties to file court papers (including pleadings) and pay court fees electronically.


The number of cases being heard by the courts has increased now that we have left behind the Covid-19 pandemic. Notable examples from this year are discussed briefly below.


The Protector of a Bermuda trust is a non-trustee who is sometimes given wide-ranging powers – particularly the powers to give or refuse consent to the proposed use, by a trustee, of its discretionary decision-making powers. The Protector first arose in the offshore trust industry, to afford those who settled the trust (living overseas) with an added level of comfort. Settlors could appoint someone they knew and trusted (eg, personal advisor/lawyer) as Protector to essentially monitor the offshore trustee who was in many cases not well known to the settlors.

In February 2023, Bermuda's Court of Appeal issued an important judgment about the role Protectors should play when exercising a power of consent over the exercise of discretionary powers by a trustee: X Trusts [2023] CA (Bda) 4 Civ. The judgment clarifies a question that has arisen in other jurisdictions lately, as to whether the role of Protectors is a narrow role (confined to ensuring the trustee's decision is a rationale and valid one), or a wider role (consistent with Protectors enjoying an independent decision-making power of their own). The Court of Appeal adopted the narrow role (subject to the exact wording of the trust deed) in a comprehensive judgment that provides detailed analysis of the role of Protectors. It is not known if the decision is being appealed to the Privy Council.


In Bermuda minority shareholders are entitled to be paid fair value for their shares on the amalgamation or merger of public companies. Dissenting shareholders may bring a 'fair value' claim against the company, contending that the price paid to them for their shares did not represent fair value. The claim is quantified as the difference in value between the company's offer for the shares, and the amount assessed by the court as the fair value at the time of the amalgamation/merger.

A number of fair value cases are progressing through the courts which have given rise to significant issues concerning the standing of dissenting shareholders to bring fair value claims, the extent to which a company can claim privilege against a shareholder in respect of communications prior to the amalgamation/merger, and the obligations of a company to disclose documents held by a subsidiary, which turns on whether the parent company exercises 'practical control' over the subsidiary.


Under Bermuda law it is permissible for a company to indemnify its directors against liability to the company in respect of wrongful conduct falling short of fraud and dishonesty (e.g., negligence or breach of trust, provided there is no fraud/dishonesty involved): section 98 of the Companies Act 1981. The provision extends to any officer of the company, or any person employed by the company as an auditor.

In June 2023, the Court of Appeal delivered a judgment confirming that the byelaw indemnity of Global Distressed Alpha Capital I Limited did not apply to a claim to account for unlawful profits or gains, even where allegations of dishonesty had been made. The decision turned on the proper interpretation of that company's specific byelaws. The Court of Appeal found that the company's broadly drafted indemnity was inconsistent with a (separate) waiver provision contained in the byelaws, such that it was not possible to give the directors the benefit of a carte blanche indemnity: Global Distressed Alpha Capital I Limited v Herman [2023] CA (Bda) 12 Civ.

First Published in Chambers and Partners.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.