Fiduciary Principles in European Civil Law Systems

Oxford Handbook of Fiduciary Law (Evan J. Criddle, Paul B. Miller & Robert H. Sitkoff eds., 2018 Forthcoming)

Fordham Law Legal Studies Research Paper No. 3142202

European Corporate Governance Institute (ECGI) - Law Working Paper No. 392/2018

41 Pages Posted: 21 Mar 2018 Last revised: 31 Mar 2018

See all articles by Martin Gelter

Martin Gelter

Fordham University School of Law; European Corporate Governance Institute (ECGI)

Genevieve Helleringer

University of Oxford - Institute of European and Comparative Law; ESSEC Business School; European Corporate Governance Institute (ECGI)

Date Written: March 1, 2018

Abstract

This chapter surveys fiduciary principles in Western European civil law jurisdictions. Focusing on France and Germany, we suggest that functional equivalents to fiduciary duties have developed on the Continent, although they do not always carry exactly the same connotations as their common law counterparts. We suggest that the common law developed fiduciary duties as a distinct category largely for two reasons. First, the common law distinguished between law and equity, with fiduciary law developing within equity. By contrast, contracts law required consideration, which meant that fiduciary principles for gratuitous actions necessarily arose outside of contract law. Civil law generally did not develop this particular categorization. For example, the paradigmatic fiduciary relationship, the mandate (agency), is by default a gratuitous contract. Consequently, the lines between fiduciary and contract law remained blurred. Second, common law bargaining for contracts emphasizes part autonomy more strongly, while the civil law of contracts incorporated a stronger duty of good faith, thus making it more hospitable to an implied and inchoate loyalty obligation. The duty of loyalty in civil law jurisdictions is not categorically different from such duties, but exists on a continuum with them. Consequently, civil law duties of loyalty in those relationships that would be considered fiduciary under the common law can be seen as an extension of weaker loyalty obligations elsewhere. We survey the civil law of agency, equivalents of trust, as well as corporate and financial law. Germany and countries influenced by German law began to identify duties of loyalty in corporate and trust relationships in the middle of the 20th Century and identified them as a larger civil law principle permeating different areas of law. France and related jurisdictions have been more reluctant to adopt such duties, and have been more likely to rely on specific statutory prohibitions to reach similar results.

Keywords: fiduciary duties, related-party transactions, corporations, duty of loyalty, French private law, German private law, Liechtenstein trust, Treuhand, agency, mandate, equity, legal families.

JEL Classification: K12, K19, K22,

Suggested Citation

Gelter, Martin and Helleringer, Genevieve, Fiduciary Principles in European Civil Law Systems (March 1, 2018). Oxford Handbook of Fiduciary Law (Evan J. Criddle, Paul B. Miller & Robert H. Sitkoff eds., 2018 Forthcoming) ; Fordham Law Legal Studies Research Paper No. 3142202; European Corporate Governance Institute (ECGI) - Law Working Paper No. 392/2018. Available at SSRN: https://ssrn.com/abstract=3142202

Martin Gelter (Contact Author)

Fordham University School of Law ( email )

150 West 62nd Street
New York, NY 10023
United States
646-312-8752 (Phone)

HOME PAGE: http://www.fordham.edu/info/23135/martin_gelter

European Corporate Governance Institute (ECGI)

Brussels, B-1050
Belgium

HOME PAGE: http://www.ecgi.org/members_directory/member.php?member_id=621

Genevieve Helleringer

University of Oxford - Institute of European and Comparative Law ( email )

St Cross Building
St Cross Road
Oxford, OX1 3UL
United Kingdom

ESSEC Business School ( email )

3 Avenue Bernard Hirsch
CS 50105 CERGY
CERGY, CERGY PONTOISE CEDEX 95021
France

European Corporate Governance Institute (ECGI) ( email )

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

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