# Fiduciary duties: loyalty and no-conflict principles

> **Key takeaway:** Loyalty core (Mothew): no conflict, no unauthorised profit (Bray; Boardman). Informed consent can authorise. Remedies: account, equitable compensation, CT over bribes (FHR). Not every relationship is fiduciary; not every breach by a fiduciary is a fiduciary breach.

- **Jurisdiction:** England & Wales
- **Practice area:** Trusts And Chancery
- **Last reviewed:** 2026-08-04
- **Interactive page:** https://kttclegal.info/library/notes/TrustsAndChancery/fiduciary-duties-overview
- **Keywords:** fiduciary duties, no conflict, no profit, Boardman v Phipps, Bray v Ford, Mothew, account of profits, secret commission, loyalty

## What is this about?

Fiduciary duties impose strict obligations of loyalty on those who undertake to act for or on behalf of another in circumstances giving rise to a relationship of trust and confidence. Trustees, company directors, agents, and some professional advisers are paradigm fiduciaries; the categories are not closed, but not every contractual relationship is fiduciary.

## What is the core rule?

A fiduciary must act in good faith, not place themselves in a position of conflict between duty and interest (or between competing duties) without informed consent, and must not make an unauthorised profit from their fiduciary position. Core authorities include Bray v Ford and Boardman v Phipps. Remedies include account of profits, equitable compensation, rescission, and in appropriate cases proprietary constructive trusts over secret commissions (FHR). The no-conflict / no-profit rules are strict; honesty is not always a defence to the duty to account.

## What are the elements or test?

1. Is there a fiduciary relationship (status-based or ad hoc undertaking of loyalty)?
2. What is the scope of the fiduciary obligation (not every aspect of a relationship is fiduciary — see Mothew on the core duty of loyalty)?
3. Has there been a conflict of duty and interest, or conflict of duties, or an unauthorised profit?
4. Was there fully informed consent from the principal?
5. Remedy: personal account / equitable compensation / proprietary claim where available?

## Which authorities matter?

- **Bray v Ford [1896] AC 44** — Classic statement that a fiduciary must not put themselves in a position where duty and interest conflict.
- **Boardman v Phipps [1967] 2 AC 46** — Strict liability to account for profits made from fiduciary position even where the principal benefits and the fiduciary acts honestly; information and opportunity cases.
- **Bristol and West Building Society v Mothew [1998] Ch 1** — Millett LJ's influential description of fiduciary loyalty as the distinguishing obligation; not all breaches by a fiduciary are fiduciary breaches.
- **FHR European Ventures LLP v Cedar Capital Partners LLC [2014] UKSC 45, [2015] AC 250** — Secret commissions held on constructive trust for the principal.

## How does this apply in practice?

Director duties are also partly codified in Companies Act 2006 (ss.171–177); always check statutory duties alongside equitable fiduciary principles. Solicitors' and agents' retainers may combine contractual, tortious, and fiduciary obligations with different measures of loss. This note does not cover trustee investment statutory duties in detail.

## What are common pitfalls?

- Labelling every professional negligence claim as a fiduciary breach to obtain account of profits
- Assuming honesty prevents an account of profits (Boardman)
- Ignoring the need for fully informed consent when authorising conflicts
- Treating Mothew's loyalty core as meaning fiduciaries have no other duties — they often have concurrent non-fiduciary duties of care

## When would a practitioner use this?

Relevant in director conflicts, agent commissions, joint ventures, and solicitor/client loyalty disputes.

## Quick reference

Loyalty core (Mothew): no conflict, no unauthorised profit (Bray; Boardman). Informed consent can authorise. Remedies: account, equitable compensation, CT over bribes (FHR). Not every relationship is fiduciary; not every breach by a fiduciary is a fiduciary breach.

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*Reference material from [KTTC Legal](https://kttclegal.info/), not legal advice. Work product supports instructing solicitors and barristers under their supervision. England & Wales.*