Breach of Fiduciary Duty in UK Law

Leading Cases
  • Bristol and West Building Society v Mothew
    • Court of Appeal (Civil Division)
    • 24 Jul 1996

    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.

  • Bristol and West Building Society v Mothew
    • Court of Appeal (Civil Division)
    • 24 Jul 1996

    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.

    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.

    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.

  • HM Revenue and Customs v Holland; Re Paycheck Services 3 Ltd
    • Supreme Court
    • 24 Nov 2010

    In Fayers Legal Services Ltd v Day, ( unreported) 11 April 2001, a case relating to breach of fiduciary duty, Patten J, rejecting a claim that the defendant was a de facto director of the company and had been in breach of fiduciary duty, said that in order to make him liable for misfeasance as a de facto director the person must be part of the corporate governing structure, and the claimants had to prove that he assumed a role in the company sufficient to impose on him a fiduciary duty to the company and to make him responsible for the misuse of its assets.

  • Pitt and another v Holt and another; Futter and another v Futter and Others
    • Court of Appeal (Civil Division)
    • 09 Mar 2011

    It will be voidable if, and only if, it can be shown to have been done in breach of fiduciary duty on the part of the trustees. If it is voidable, then it may be capable of being set aside at the suit of a beneficiary, but this would be subject to equitable defences and to the court's discretion. The trustees' duty to take relevant matters into account is a fiduciary duty, so an act done as a result of a breach of that duty is voidable.

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Legislation
  • Insolvency Act 1986
    • UK Non-devolved
    • 1 de Enero de 1986
    ......steps for the purpose of complying with any duty imposed on. him by section 40 or 59 of this Act ...misfeasance or breach of any fiduciary or other duty in relation. to ......
  • Company Directors Disqualification Act 1986
    • UK Non-devolved
    • 1 de Enero de 1986
    ......or, as the case may be, imposes on it the duty to make a disqualification. order there is ... S-3 . Disqualification for persistent breaches of companies legislation. 3 Disqualification for ...fiduciary or other duty by the director in relation to the ......
  • Companies Act 2006
    • UK Non-devolved
    • 1 de Enero de 2006
    ...... on the company's formation, except that the duty under section 23(1)(a) to give notice to the ... was, at the time the contract was made, in breach of regulations under that section. . (2) The ... in the same way as any other fiduciary duty owed to a company by its directors. S-179 . ......
  • Companies Act 1948
    • UK Non-devolved
    • 1 de Enero de 1948
    ......stamp duty as would have been payable if the contract had. ... or indemnifying him against liability for breach of trust. where he fails to show the degree of ...in a fiduciary capacity shall be treated as not held or. ......
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Books & Journal Articles
  • Can mere incompetence constitute a breach of fiduciary duty?
    • Núm. V, Enero 2019
    • Dundee Student Law Review
    • George Beaton
    • Graduated English LLB Student at the University of Dundee. George would like to thank the editorial board and the anonymous peer reviewer for their kind comments.
    • 1-4
  • Recent Developments Regarding the Misappropriation Theory in Securities Fraud Actions
    • Núm. 5-4, Febrero 1998
    • Journal of Financial Crime
    • 381-384
    On 25th June, 1997, the US Supreme Court issued an important decision in which it endorsed an expanded theory of insider trading liability under the federal securities laws. In United States v O'Ha...
    ...... t t o sho w a breac h o f fiduciary duty . Th e cas e concerne d th e liabilit ... s th e securitie s law s b y breachin g hi s dut y t o th e company' s ......
  • Shareholder empowerment, steps forward and steps back. Comparative analysis of the US and UK regulations
    • Núm. 27-2, Mayo 2019
    • Journal of Financial Regulation and Compliance
    • 169-196
    Purpose: The global financial crisis of 2007-2008 prompted a significant debate on corporate governance and shareholder empowerment. A question arises as to whether shareholders ought to be further...
    ...... brought byshareholders on the grounds of a breach of fi duciary duty. Findings – This paper ...and Stout, L. (2008) , “ Fiduciary duties for active shareholder s ” , Cornell Law ......
  • Criminal Misconduct in a Public Office
    • Núm. 4-2, Abril 1996
    • Journal of Financial Crime
    • 172-173
    Public officials are subject to a wider range of duties than private employees. In both cases, certain acts, such as stealing from their employer, will be criminal. But much misconduct by employees...
    ...... , fo r exampl e fo r breac h o f fiduciary dutie s o r th e dut y o f fidelity. ......
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Law Firm Commentaries
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