Equity and Trusts

The Nature of Fiduciary Liability in English Law by Sukhninder Panesar

Introduction

Although the abuses of fiduciary relationship have long been one of the major
concerns of equitable jurisdiction, the concept of a fiduciary has been far from clear.
In Lac Minerals v International Corona Ltd1 La Forest J. in the Supreme Court of
Canada explained that ‘…there are few legal concepts more frequently invoked but
less conceptually certain than that of the fiduciary relationship.’2 In his seminal work
Professor Finn described a fiduciary relationship as ‘one of the most ill-defined, if not
altogether misleading terms in our law’.3 It is, perhaps this lack of a comprehensive
definition that has made the law of fiduciaries not only an interesting area for legal
scholars, but also a difficult one for those asked to define the circumstances in which
such a relationship will arise. English law categorizes certain relationships as
fiduciary per se. This is no more than saying that certain relations are, by their very
nature, fiduciary per se, that is, without further inquiry. Thus the settled categories of
fiduciary relationships include solicitor and client4; agent and principal5; company
director and the company6, and trustee and beneficiary.7 However, despite certain
relationships being categorized as fiduciary per se, the list of fiduciary relationships is
not closed. The courts have, from time to time, admitted into the category of
fiduciary relationships relationships that are not traditionally fiduciary. For example,
in O’Sullivan v Management Agency & Music Ltd8 a manager was held to owe
fiduciary duties to a singer. On the facts a new and inexperienced pop singer had
entered into a contract on grounds of undue influence. The court held that, by virtue
of his inexperience and the undue influence asserted by the manager, the facts gave
rise to a fiduciary relationship.
This article explores three major aspects of fiduciary law that have been the subject
matter of much debate in recent times. The first aspect examines the circumstances in..

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