Fiduciary in UK Law
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Bristol and West Building Society v Mothew
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Equitable compensation for breach of the duty of skill and care resembles common law damages in that it is awarded by way of compensation to the plaintiff for his loss. There is no reason in principle why the common law rules of causation, remoteness of damage and measure of damages should not be applied by analogy in such a case.
A fiduciary is someone who has undertaken to act for or on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence. A fiduciary must act in good faith; he must not make a profit out of his trust; he must not place himself in a position where his duty and his interest may conflict; he may not act for his own benefit or the benefit of a third person without the informed consent of his principal.
The nature of the obligation determines the nature of the breach. The various obligations of a fiduciary merely reflect different aspects of his core duties of loyalty and fidelity. Breach of fiduciary obligation, therefore, connotes disloyalty or infidelity. Mere incompetence is not enough. A servant who loyally does his incompetent best for his master is not unfaithful and is not guilty of a breach of fiduciary duty.
A fiduciary who acts for two principals with potentially conflicting interests without the informed consent of both is in breach of the obligation of undivided loyalty; he puts himself in a position where his duty to one principal may conflict with his duty to the other: see Clark Boyce v Mouat [1994] 1 AC 428 and the cases there cited. This is sometimes described as "the double employment rule". Breach of the rule automatically constitutes a breach of fiduciary duty.
Even if a fiduciary is properly acting for two principals with potentially conflicting interests he must act in good faith in the interests of each and must not act with the intention of furthering the interests of one principal to the prejudice of those of the other: see Finn (op.cit.) He must not allow the performance of his obligations to one principal to be influenced by his relationship with the other. He must serve each as faithfully and loyally as if he were his only principal.
Conduct which is in breach of this duty need not be dishonest but it must be intentional. An unconscious omission which happens to benefit one principal at the expense of the other does not constitute a breach of fiduciary duty, though it may constitute a breach of the duty of skill and care.
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Arklow Investments Ltd and Another v I.D. MacLean
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In the present context, the concept encaptures a situation where one person is in a relationship with another which gives rise to a legitimate expectation, which equity will recognise, that the fiduciary will not utilise his or her position in such a way which is adverse to the interests of the principal. The existence and the extent of the duty will be governed by the particular circumstances.
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Does the Fiduciary Bell Toll?
The Law Commission has recently examined fiduciary relations and securities regulation. The purpose of this paper is a re‐examination of some of the questions posed in the Consultation Paper (No. 1...
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Credit Advisers, Consumer Credit and Equitable Fiduciary Obligations
Consumers use financial intermediaries such as brokers and other credit advisers to navigate complex financial markets and to provide guidance on credit products. In 2017 ASIC reported that ‘[b]rok...
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How fiduciary duty law incentivises investors to manage sustainability risks
The compatibility of Environmental, Social and Governance (ESG) risk management with the investment management requirements under the investors’ fiduciary duties (FD) figures among the key question...
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Fiduciary or Contractual? Experts' Duties and Conflicting Interests
In the case of (1) Secretariat Consulting Pte Ltd, (2) Secretariat International UK Ltd, (3) Secretariat Advisors LLC v A Company [2021] EWCA Civ 6, the Court of Appeal upheld the decision of the T...
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Employment News: fiduciary duties, NICs, jurisdiction
Battle Royal – handling of boardroom dispute was repudiatory breach - The High Court decision in Stobart Group Ltd v Tinkler explores the extent of a director's duties in the context of a boardr...
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