The fiduciary relationship - who are fiduciaries?-FS Flashcards
(10 cards)
What is the core distinguishing obligation of a fiduciary?
The core obligation of a fiduciary is the duty of loyalty, which requires them to act in the best interests of the person to whom they owe fiduciary duties.
How was a fiduciary defined in the case of Bristol and West Building Society v Mothew?
A fiduciary is someone who has undertaken to act on behalf of another in a particular matter, in circumstances that give rise to a relationship of trust and confidence
Who is the most commonly encountered fiduciary in the context of trust law?
A trustee is the most common example of a fiduciary, owing duties of loyalty and care to the beneficiaries of the trust.
Do trustees only owe statutory duties to beneficiaries?
No. Trustees owe both statutory duties under legislation such as the Trustee Act 2000 and fiduciary duties such as loyalty and acting in good faith.
What other professional roles typically give rise to fiduciary duties?
Company directors, solicitors, agents, business partners, and certain employees all owe fiduciary duties to their respective companies, clients, principals, or co-partners.
What is a fact-based fiduciary relationship?
A fact-based fiduciary relationship arises where one party undertakes to act on behalf of another, and the other reasonably expects them to act in their best interests, even without a formal designation.
What must be present for a fiduciary relationship to exist?
There must be an undertaking by one person to act on behalf of another, in a context that involves trust, reliance, and confidence.
Can a fiduciary duty exist even in commercial contexts?
Yes. Fiduciary duties can arise in commercial contexts, such as between a football agent and a player, where one party is expected to put the other’s interests first.
What is the consequence of breaching a fiduciary duty?
A fiduciary who breaches their duty may be held personally liable and can be required to compensate the principal or beneficiary, or account for any unauthorised profits.
Why is the obligation of loyalty so central to fiduciary relationships?
Because fiduciary relationships are based on trust and confidence, the obligation of loyalty ensures that fiduciaries do not place themselves in a position of conflict and always act in the best interests of those they serve.
