fiduciary concept for the law students.pptx

fiduciary concept for the law students.pptx

• 1.
  Presentation: Fiduciary Law– Equity Summary Fiduciary Law: Principles, Doctrines & Remedies Based on Worthington’s Equity Presented by: [SKM]
• 2.
  Core Principles &Doctrinal Structure  Definition: Fiduciary = person entrusted to act in another’s interest  Examples: Trustees, directors, agents, solicitors, partners  Purpose: Enforce loyalty through deterrent remedies  Key Idea: Law mimics altruism, doesn’t require it
• 3.
  Duty of Loyalty& Self-Denial  Rules: o Avoid conflicts of interest o No secret profits o Must disclose and get consent  Examples: o Trustee buying trust assets o Director exploiting company opportunity  Remedy: Disgorgement (even without loss)
• 4.
  Disgorgement – Principles& Policy Tensions  Proprietary vs. Personal: o Proprietary = principal owns profit o Personal = deterrence, not compensation  Insolvency Issue: o Proprietary remedy may unfairly prioritize principal  Reform Proposal: o Treat as personal remedy, defer in insolvency
• 5.
  Contracts Between Fiduciary& Principal  Current Rule: Rescission allowed, not disgorgement  Problems: o Asset sold = rescission impossible o Market crash = fiduciary bears risk  Suggested Reform: o Monetary disgorgement instead of rescission
• 6.
  Reach of FiduciaryRegulation  Types: o Status-based (automatic) o Fact-based (case-by-case)  Limits: o Not all trust = fiduciary o Requires self-denial  Comparative Note: o Civil law uses good faith, no proprietary disgorgement
• 7.
  Abuse of Powervs. Fiduciary Breach  Abuse of Power: o Applies to all decision-makers o Focus on decision process o Improper purpose = voidable  Example: o Directors issuing shares to manipulate votes
• 8.
  Proper Purposes Doctrine Power must serve intended purpose  Courts require re-exercise, not substitution  Directors must prioritize shareholder interests
• 9.
  Breach of Confidence& Information Use  Nature of Info: Valuable, not property  Misuse: Breaches secrecy, not possession  Remedies: o Disgorgement (rare) o Compensation (lost opportunity or use value)  Limits: Courts rely on Lord Cairns’ Act
• 10.
  Why Disgorgement Matters Disgorgement = deterrent remedy  Removes incentive for wrongdoing  Exceptional remedy: used when no other suffices