Fiduciaries — trustees, company directors, solicitors, agents and partners — are trusted to act for someone else. The law guards that trust strictly: a fiduciary must not make an unauthorised profit from their position, full stop. It doesn't matter whether they were honest, whether the principal lost anything, or whether the principal could have made the profit themselves. As a practising solicitor you'll meet this rule constantly — advising trustees and directors on what they can keep, and acting for beneficiaries and companies seeking to recover profits made behind their backs.
This lesson builds the rule from the ground up, then shows you how to apply it and what remedies follow.
- The Rule and Fiduciary Relationships — what the no-profit rule is, why liability is strict, and which relationships count as fiduciary.
- What Counts as an Unauthorised Profit — the connection test, and how it catches director's fees, commissions and bribes.
- Authorisation, Remuneration and Expenses — the routes that make a profit lawful, and how trustees may be paid and reimbursed.
- Remedies — account of profits, constructive trust and the discretionary equitable allowance, and why the difference matters.
- The Self-Dealing and Fair-Dealing Rules — what happens when a fiduciary transacts with trust property or buys out a beneficiary.