“To what extent do the possible claims and remedies available in equity offer a sufficient
deterrent?” Drawing on module materials, critically discuss this question in relation to ONE of
the following:
(a) A breach of fiduciary duty
Equity imposes F duties in order to protect relationships of trust and confidence from abuse,
particularly where one party exercises discretionary power on behalf of another
F duties are enforced through strict equitable claims and remedies, particularly the no-conflict and
no-profit rules, which seek to prevent Fs from abusing their position for personal advantage
Ultimately, this essay will argue that equitable remedies provide an extremely powerful deterrent
because F liability is strict, F cannot retain any profits irrespective of whether he acted honestly or
in good faith and proprietary remedies expose Fs to severe consequences
Nonetheless, the deterrent effect is controversial because the strictness of F law has been criticised
for imposing liability even in cases involving honest conduct, no actual loss to P and merely
hypothetical conflicts of interest
Paragraph 1
F duties are primarily concerned with enforcing loyalty and preventing Fs from placing themselves
in positions where personal interests may conflict with duties owed to P
The duty of loyalty identified in Bristol and West Building Society v Mothew encompasses the
duties to act in good faith, avoid conflicts of interest and avoid making unauthorised profits
F liability is strict as the courts seek to deter even the possibility of abuse, rather than merely
compensate for actual wrongdoing after it occurs
The strict no-profit rule emerged in Keech v Sandford, where T who renewed a lease in his
own name was required to account for the profit despite the landlord refusing to renew the
lease of B (carried out for B’s benefit)
Lord King justified this harsh rule on the basis that relaxing F liability would create
dangerous opportunities for abuse and undermine trust in F relationships
Strict liability approach affirmed in Regal (Hastings) v Gulliver where directors were required
to account for profits despite acting honestly and the company itself being unable to obtain
the shares
Similarly, in Boardman v Philipps, liability was imposed despite Fs acting in good faith and
significantly benefitting the trust
These cases ultimately demonstrate that F liability does not depend on dishonesty, bad faith
or proof of loss (strongly reinforcing deterrent dimension)
Strict imposition of liability follows the rationale that this position has the best deterrent effect
against abuse of position (Bray v Ford) and that attempting fact-finding missions into the motives of
F goes beyond the scope and ability of the court (Regal (Hastings))
deterrent?” Drawing on module materials, critically discuss this question in relation to ONE of
the following:
(a) A breach of fiduciary duty
Equity imposes F duties in order to protect relationships of trust and confidence from abuse,
particularly where one party exercises discretionary power on behalf of another
F duties are enforced through strict equitable claims and remedies, particularly the no-conflict and
no-profit rules, which seek to prevent Fs from abusing their position for personal advantage
Ultimately, this essay will argue that equitable remedies provide an extremely powerful deterrent
because F liability is strict, F cannot retain any profits irrespective of whether he acted honestly or
in good faith and proprietary remedies expose Fs to severe consequences
Nonetheless, the deterrent effect is controversial because the strictness of F law has been criticised
for imposing liability even in cases involving honest conduct, no actual loss to P and merely
hypothetical conflicts of interest
Paragraph 1
F duties are primarily concerned with enforcing loyalty and preventing Fs from placing themselves
in positions where personal interests may conflict with duties owed to P
The duty of loyalty identified in Bristol and West Building Society v Mothew encompasses the
duties to act in good faith, avoid conflicts of interest and avoid making unauthorised profits
F liability is strict as the courts seek to deter even the possibility of abuse, rather than merely
compensate for actual wrongdoing after it occurs
The strict no-profit rule emerged in Keech v Sandford, where T who renewed a lease in his
own name was required to account for the profit despite the landlord refusing to renew the
lease of B (carried out for B’s benefit)
Lord King justified this harsh rule on the basis that relaxing F liability would create
dangerous opportunities for abuse and undermine trust in F relationships
Strict liability approach affirmed in Regal (Hastings) v Gulliver where directors were required
to account for profits despite acting honestly and the company itself being unable to obtain
the shares
Similarly, in Boardman v Philipps, liability was imposed despite Fs acting in good faith and
significantly benefitting the trust
These cases ultimately demonstrate that F liability does not depend on dishonesty, bad faith
or proof of loss (strongly reinforcing deterrent dimension)
Strict imposition of liability follows the rationale that this position has the best deterrent effect
against abuse of position (Bray v Ford) and that attempting fact-finding missions into the motives of
F goes beyond the scope and ability of the court (Regal (Hastings))
