Prescriptive Fiduciary Duties

(2018), 37 University of Queensland Law Review 261-287

27 Pages Posted: 19 Apr 2019

See all articles by Lionel Smith

Lionel Smith

McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law; University of Oxford - Faculty of Law

Date Written: October 3, 2018

Abstract

It has become an orthodoxy in some quarters that fiduciary duties are only proscriptive, forbidding certain actions, and never prescriptive, requiring positive action. I argue that this is a misunderstanding. The argument begins by attempting to explain how this orthodoxy arose, and then by challenging the presuppositions that led to it. The paper goes on to argue that some of the most important duties of a fiduciary are prescriptive duties. It further argues that the label 'fiduciary duties' is properly attached to all of the duties that arise out of a fiduciary relationship, just as 'contractual duties' arise out of a contractual relationship and 'parental duties' arise out of a parental relationship. Along the way, it suggests that we need a better understanding of the notion of a fiduciary conflict of interest; properly understood, this means a conflict between the fiduciary's self-interest and his or her fiduciary duty relating to the exercise of his or her fiduciary powers. This helps us to see that the rule against unauthorized profits is independent of the rules against exercising fiduciary powers while in a conflict situation. The overall goal of the paper is to develop a more accurate understanding of the fiduciary relationship and its many juridical features.

Keywords: fiduciary duties, fiduciary relationships, duty of disclosure

JEL Classification: K00, K10, K11, K19, K36

Suggested Citation

Smith, Lionel, Prescriptive Fiduciary Duties (October 3, 2018). (2018), 37 University of Queensland Law Review 261-287. Available at SSRN: https://ssrn.com/abstract=3365137

Lionel Smith (Contact Author)

McGill University, Faculty of Law, Paul-André Crépeau Centre for Private and Comparative Law ( email )

3690 Peel Street
Montreal, Quebec H3A 1W9
Canada
514-398-4670 (Phone)
514-398-4659 (Fax)

HOME PAGE: http://www.mcgill.ca/law/about/profs/smith-lionel

University of Oxford - Faculty of Law ( email )

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

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