Justifying Fiduciary Duties

55 Pages Posted: 13 Jun 2012 Last revised: 30 Aug 2013

Paul B. Miller

McGill University Faculty of Law

Date Written: June 13, 2012

Abstract

Fiduciary duties are critical to the integrity of a remarkable variety of relationships, including those between trustee and beneficiary, director and corporation, agent and principal, lawyer and client, doctor and patient, parent and child, and guardian and ward. Notwithstanding their variety, all fiduciary relationships are presumed to enjoy common characteristics and to attract a core set of demanding legal duties, most notably a duty of loyalty. Surprisingly, however, the justification for fiduciary duties is an enigma in private law theory. It is unclear what makes a relationship fiduciary and why fiduciary relationships attract fiduciary duties. This article takes up the enigma. It assesses leading reductivist and instrumentalist analyses of the justification for fiduciary duties. Finding them wanting, it offers an alternative account of the juridical justification for fiduciary duties. The author contends that the fiduciary relationship is a distinctive kind of legal relationship in which one person (the fiduciary) exercises power over practical interests of another (the beneficiary). Fiduciary power is form of authority derived from the legal capacity of the beneficiary or a benefactor. The duty of loyalty is justified on the basis that it secures the exclusivity of the beneficiary’s claim over fiduciary power so understood.

Keywords: Philosophy of Private Law, Private Law Theory, Private Law Obligations, Fiduciary Law, Fiduciary Duties, Duty of Loyalty

JEL Classification: K00, K10, K11, K12, K13, K20, K22

Suggested Citation

Miller, Paul B., Justifying Fiduciary Duties (June 13, 2012). 58 McGill Law Journal 969 (2013). Available at SSRN: https://ssrn.com/abstract=2083855

Paul B. Miller (Contact Author)

McGill University Faculty of Law ( email )

3644 Peel Street
Montreal H3A 1W9, Quebec
Canada

HOME PAGE: http://www.mcgill.ca/law/about/profs/miller-paul

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