Fiduciary Loyalty Protecting the Due Performance of Non-Fiduciary Duties

The concept of loyalty, which lies at the heart of fiduciary doctrine, is a form of protection which is designed to enhance the likelihood of due performance of non-fiduciary duties by seeking to avoid influences or temptations that may distract the fiduciary from providing such proper performance. In developing this position, Fiduciary Loyalty takes the novel approach of putting to one side the difficult question of when fiduciary duties arise, in order to focus attention instead on what fiduciary duties do when they are owed. The issue of when fiduciary duties arise can then be returned to, and considered more profitably, once a clear view has emerged of the function that such duties perform. The analysis advanced in the book has both practical and theoretical implications for understanding fiduciary doctrine. For example, it provides a sound conceptual footing for understanding the relationship between fiduciary and non-fiduciary duties, highlighting the practical importance of care

Winner of the second SLS Peter Birks Prize for Outstanding Legal Scholarship 2010. Fiduciary Loyalty presents a comprehensive analysis of the nature and function of fiduciary duties. The concept of loyalty, which lies at the heart of fiduciary doctrine, is a form of protection which is designed to enhance the likelihood of due performance of non-fiduciary duties, by seeking to avoid influences or temptations that may distract the fiduciary from providing such proper performance. In developing this position, the book takes the novel approach of putting to one side the difficult question of when fiduciary duties arise in order to focus attention instead on what fiduciary duties do when they are owed. The issue of when fiduciary duties arise can then be returned to, and considered more profitably, once a clear view has emerged of the function that such duties perform. The analysis advanced in the book has both practical and theoretical implications for understanding fiduciary doctrine. For example, it provides a sound conceptual footing for understanding the relationship between fiduciary and non-fiduciary duties, highlighting the practical importance of analysing both forms of duties carefully when considering fiduciary claims. Further, it explains a number of tenets within fiduciary doctrine, such as the proscriptive nature of fiduciary duties and the need to obtain the principal's fully informed consent in order to avoid fiduciary liability. Understanding the relationship between fiduciary and non-fiduciary duties also provides a solid foundation for addressing issues concerning compensatory remedies for their breach and potential defences such as contributory fault. The distinctive purpose that fiduciary duties serve also provides a firm theoretical basis for maintaining their separation from other forms of civil obligation, such as those that arise under the law of contracts and of torts.

1 Prologue 2 Points of Departure I. Form of Analysis II. Subject Matter of Analysis A. Historical Analogies B. Modern Approach i. Genesis and Gestation ii. Justification 1 3 Peculiarly Fiduciary Duties I. Duty to Perform the Task Undertaken II. Duties of Care and Skill III. Conflict and Profit Principles IV. Good Faith V. Proper Purposes Doctrine VI. Fiduciary Powers VII. Duty to Act in Good Faith in the Principal's Best Interests 4 Fiduciary Loyalty I. Introduction II. Subsidiary Prophylactic Protection A. Protective Function B. Prophylaxis C. Subsidiarity III. Remedies A. Rescission and Profit-Stripping i. Rescission ii. Accounts of Profits and Constructive Trusts iii. Connection with Fiduciary Protection B. Compensation for Loss i. Availability ii. Causation and Loss iii. Connection with Fiduciary Protection IV. Critics 5 Fiduciary Doctrine and Morality I. General Observations II. The Argument from History III. The Profit Principle A. Existence of the Profit Principle B. Relationship to the Conflict Principle IV. The Fair-Dealing Rule A. The Self-Dealing Rule B. The Fair-Dealing Rule i. References to 'Fairness' ii. Non-Critical Relevance of 'Fairness' iii. Fairness as Evidence of Full Disclosure iv. Relationship to the Self-Dealing Rule and Conflict Principle V. The Corporate Opportunity Doctrine 6 Conflicts between Inconsistent Duties I. Origins II. Content and Function A. Potential Conflicts B. Actual Conflicts C. Inhibition i. Pattern of Liability ii. Function III. Remedies A. Stopping Further Action B. Rescission of Resultant Transaction C. Forfeiture of Fees and Other Profits i. Fees Paid by the Non-claimant Principal ii. Fees Paid by the Claimant Principal D. Equitable Compensation i. Availability and Function ii. Identifying Loss iii. Contributory Fault 7 Implications I. Scope of Fiduciary Duties II. The Vital Nature of Non-fiduciary Duties A. Consequence of the Protective Function B. Potential Counter-examples i. Preventing Circumvention of Fiduciary Protection ii. Solicitors Cases iii. Negotiations towards Joint Ventures iv. Bare Trusts III. Proscriptive Duties IV. Authorisation V. Critiques of Fiduciary Doctrine 8 Conceptual Affinities I. Contract and Fiduciary Doctrine II. Torts and Fiduciary Doctrine A. Fiduciary Doctrine and Negligence B. Surrogacy for Tort Law Generally i. Cause of Action Surrogacy ii. Civil Wrongs III. Undue Influence and Confidence A. Undue Influence B. Confidence 9 The Incidence of Fiduciary Duties I. Academic Commentators A. Acting on Behalf of Another B. Discretion and Power C. Reasonable Expectations D. Limited Access II. Turning Theory into Practice A. Judicial Applications B. Relevant Considerations 10 Epilogue