Lionel Smith, ‘Prescriptive Fiduciary Duties’

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.

Smith, Lionel, Prescriptive Fiduciary Duties (October 3, 2018). (2018) 37 University of Queensland Law Review 261-287.

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