Why is the fiduciary concept so difficult to understand? After all, its history in English law dates back more than three hundred years and its philosophical and doctrinal origins reach back even farther. Fiduciary principles in common law jurisprudence predate even the seminal case of Keech v. Sandford<\/em>[1]<\/a> (Keech<\/em>) in 1726 that is generally referenced as the first to outline fiduciary principles in English law.[2]<\/a> The fiduciary concept\u2019s civil law origins are even older, dating back to principles of Roman law,[3]<\/a> while its foundational principles may be discovered in both ancient Greek thought and in the Old Testament.[4]<\/a><\/p>\n Published law reporters abound with cases that apply fiduciary principles in a variety of circumstances and discuss them in various levels of detail. The number of fiduciary law articles printed in law journals indicates that many authors have written about the fiduciary concept, particularly in the last half-century.[5]<\/a> Most dedicate considerable space in their commentaries to the continuing issues that plague fiduciary jurisprudence. Despite all of the attention paid to the fiduciary concept, we seem no further ahead in our understanding of it. Curiously, this dilemma has not diminished the continuing use of fiduciary principles. Indeed, quite the opposite effect may be seen. Fiduciary principles have gained in popularity consistently over the past few decades and are now ubiquitous in contemporary jurisprudence. This reality raises significant questions about the continued use of misunderstood legal concepts in contemporary jurisprudence.<\/p>\n A number of difficulties and misunderstandings have arisen as a result of the misapplication of fiduciary law and its principles. These difficulties and misunderstandings provide a strong impetus to inspire more detailed examinations of fiduciary purpose and how fiduciary law functions to achieve that purpose. It is axiomatic, however, to state that the problematic application of fiduciary principles may only be replaced with more doctrinally appropriate outcomes once the fiduciary concept is better understood and its principles more appropriately implemented. The knotty situation that exists as a result of the unreflective and unprincipled application of fiduciary law is not going to resolve itself\u2014history has already demonstrated that. More proactive and purposeful initiatives aimed at clarifying the application of the fiduciary concept are required in order to straighten out the difficulties that continue to surround the institution of fiduciary principles and cloud fiduciary jurisprudence.<\/p>\n There is often a wide gulf between possessing knowledge of legal concepts and possessing a sophisticated appreciation of their historical and theoretical foundations. Truly understanding a legal concept necessitates understanding why<\/em> it exists: this entails knowing what that concept was constructed to accomplish and the purpose or purposes it was intended to serve. Put more simply, we should strive toward knowing not only what a particular legal concept is<\/em> (its function), but also what it is for<\/em> (its purpose).<\/p>\n For the most part, it appears that practical applications of legal concepts do not mandate this depth of knowledge. In a great many situations, the law does not appear to suffer too greatly where the practical application of its concepts implements only a fragment of what the law in a particular area is actually comprised of. There are, however, some significant exceptions. It is suggested here that the fiduciary concept is one of those exceptions because of its complexity and the continuing uncertainty over when and where it ought to apply, caused by too many improper applications of fiduciary principles.<\/p>\n The continued application of fiduciary principles despite the notable absence of substantive articulation of the fiduciary concept is troubling. The use of fiduciary principles in this manner dates as far back as the first half of the nineteenth century.[6]<\/a> The subsequent development of a far-reaching fiduciary jurisprudence, in the absence of substantive understanding of what the fiduciary concept both is<\/em> and is for<\/em>, is responsible for the reams of doctrinally incorrect or questionable applications of fiduciary principles.[7]<\/a> The present article is unconcerned with the reason for this jurisprudential development, which is the subject for another investigation. It is concerned, however, with the fact that it has happened. Both situations are problematic: the former is the subject of historical curiosity and jurisprudential development, while the latter is a fundamental legal problem that remains particularly relevant in the present day.<\/p>\n Judges and legal authors have taken ample opportunities to discuss the fiduciary concept and have engaged in numerous attempts to work out perceived difficulties in its application. One of the latest names to be added to this list is Remus Valsan, who published an article in a recent issue of this law journal,[8]<\/a> which has provoked this response. Although Valsan makes positive contributions to the literature on the fiduciary concept and its understanding, it is unfortunate that he, like others before him, has left unaddressed the fundamental question of what the fiduciary concept is for. It may well be that this was simply not his purpose in writing his article. Indeed, his desire to alter and expand the existing understanding of conflicts of interest appears paramount in his analysis. While that particular contribution is an important one, I argue that more fundamental fiduciary matters require attention before refinements of the type proposed by Valsan ought to be addressed. Notwithstanding the eagerness of many judges and authors to resolve the confusion surrounding the fiduciary concept, the failure to focus on why<\/em> the concept exists and what it is for<\/em> continues to inhibit its more fulsome understanding and hinders its application within the many common law and civil law jurisdictions in which it exists.[9]<\/a><\/p>\n This article asks the twin questions \u201cWhat is the fiduciary concept?\u201d and \u201cWhy does it exist?\u201d Understanding the fiduciary concept requires knowledge of fiduciary responsibility and the duties flowing from that responsibility. Without an understanding of how fiduciary duties reflect and reinforce fiduciary responsibility and relationships, one would also be wholly unaware, inter alia<\/em>, of: why fiduciary relationships exist; when interactions should be described as fiduciary; what causes fiduciary responsibility; what the duties owed pursuant to that responsibility constitute; and what constitutes a breach of fiduciary duties once they are found to exist.<\/p>\n This article seeks to accomplish what might appear to be discrete tasks. Primarily, it seeks to establish a functional basis for understanding the fiduciary concept and the resultant duties accompanying the relationships that may appropriately be described as fiduciary.[10]<\/a> In order to establish this functional approach, it is first necessary to appreciate the uncertainty that presently surrounds the fiduciary concept (Part\u00a0I-A)\u2014in particular, the manner in which fiduciary principles have been misused and misunderstood\u2014, as well as to gain a better understanding of the function and purpose of the fiduciary concept by examining its foundational precepts. These foundational precepts explain why the fiduciary concept exists and how it ought to be properly implemented in order to facilitate its raison d\u2019\u00eatre (Part\u00a0I-B). In working toward this goal, the article considers Valsan\u2019s contribution to the literature on fiduciary duties (Part\u00a0II-B)\u2014regarding particularly his discussion of conflicts of interest and the exercise of fiduciary discretion\u2014and assesses how his article fits within the larger goal of understanding what fiduciary duties are and why they exist (Part\u00a0II-C). Part\u00a0III-A is dedicated to exploring the broad, foundational issue of why fiduciary obligations exist. Without understanding the fundamental reason for creating the fiduciary concept and the purpose it was intended to accomplish, it is impossible to ascertain the range of interactions that contain fiduciary elements within them or why any particular aspects of those larger interactions are fiduciary. Part\u00a0III-B provides context for the discussion that precedes it. It examines the classic case of Meinhard v. Salmon<\/em>[11]<\/a> (Meinhard<\/em>) for its illustration of the fiduciary concept\u2019s principles and effects discussed and distilled earlier in the article.<\/p>\n Commentators in jurisdictions like Canada, the United States, England, Australia, and New Zealand routinely discuss the fiduciary concept in relation to a wide variety of scenarios.[12]<\/a> Pleadings alleging breaches of fiduciary duty are commonplace in these jurisdictions and numerous judgments regularly find fiduciary obligations to exist. These situations suggest the existence of a vast knowledge of, and comfort with, the fiduciary concept and its attendant principles. Yet, quite the opposite is true. Fiduciary law is often characterized as one of the least understood legal constructs in the very jurisdictions in which it enjoys widespread use.[13]<\/a> The commonplace discussion and implementation of fiduciary principles within those jurisdictions conceal the lingering uncertainty surrounding the fiduciary concept. I have previously described this phenomenon as the \u201cfiduciary paradox\u201d.[14]<\/a><\/p>\n With the perception of uncertainty surrounding the fiduciary concept, it should hardly be surprising that fiduciary principles are often misapplied. What is surprising is that there have not been more inquiries into why this uncertainty still exists, particularly given the inappropriate results that have been generated in the jurisprudence. The unsophisticated and often-improper understanding of the fiduciary concept not only results in the misapplication of its principles, but also allows for the purposeful misuse of its principles to generate particular results.[15]<\/a> A more sophisticated vision and working knowledge of the fiduciary concept would prevent both of these occurrences.[16]<\/a><\/p>\n There are practical reasons why fiduciary principles continue to be utilized despite this lingering uncertainty. Unlike principles of contract or tort, fiduciary law looks not only to confirmed realities, like the existence of a conflict of interest, but also to possibilities or potential outcomes. Thus, it looks both to actual conflicts of interest as well as the possibility of conflicts of interest.[17]<\/a> This expanded scope can create significant discomfort for those accustomed to absolutes. Because the same basis for employing fiduciary principles vis-\u00e0-vis actualities operates equally for potentialities, however, there is no difference in their mode of application. The difficulties in detecting breaches of fiduciaries\u2019 duties provide sufficient reason to sanction a greater degree of latitude in applying fiduciary principles to potentially problematic scenarios in order to \u201ckeep persons in a fiduciary capacity up to their duty.\u201d[18]<\/a><\/p>\n The lingering uncertainty surrounding the fiduciary concept has, however, led some to argue in favour of limiting the application of fiduciary principles[19]<\/a> or even redefining the fiduciary concept altogether.[20]<\/a> Indeed, the continued misapplication of fiduciary principles and the failure to consider the broader implications of their application has curtailed fiduciary law\u2019s effectiveness in redressing civil claims in circumstances where the laws of contract, tort, and unjust enrichment are silent, insufficient, or ineffective.[21]<\/a><\/p>\n Numerous academics have attempted to address fiduciary uncertainty.[22]<\/a> The desire to provide a sounder foundation for understanding the fiduciary concept has become a not-insignificant cottage industry among legal academics in recent years. There are a variety of legal academics who have sought, to varying degrees, to \u201cdefine\u201d the fiduciary concept, the relationships it creates, and the obligations it imposes. These initiatives are derived from and have involved a variety of legal areas in their attempts: corporate law, partnerships, family law, agency, law and economics, contract, tort, trusts, equity, property, constitutional law, and administrative law, among others. Yet, choose your favourite fiduciary law commentator and you can be certain that this person has, at some point, bemoaned fiduciary law\u2019s uncertain application and understanding.[23]<\/a> Uncertain doctrines and principles run greater risk of producing or contributing to inefficient or incorrect outcomes.[24]<\/a><\/p>\n Rather than limiting the fiduciary concept\u2019s application or engaging in its fundamental redefinition, the problematic jurisprudential application of fiduciary principles demonstrates the need to fashion a more robust understanding of fiduciary law. Focusing on the reasons why fiduciary principles exist and what they are meant to accomplish will provide a far greater and more accurate measure of fiduciary certainty than trying to fashion definitive definitions or tests. The basic function of the fiduciary concept is known: fiduciaries are obliged to abnegate all self-interest, as well as those of third parties, and focus solely on the best interests of their beneficiaries. This requires that fiduciaries not benefit themselves or third parties, whether financially or otherwise, from their positions as fiduciaries, nor confer a benefit upon third parties at the expense of their beneficiaries\u2019 interests if the latter are tangibly related to the fiduciary nature of the parties\u2019 interaction. These prohibitions are enforced by the fiduciary rules against conflicts of interest. The rule against conflicts includes both conflicts of interest and conflicts of duty, such that any combination of these two can give rise to the prohibition. The correlation to the strict duties imposed on fiduciaries is that their beneficiaries are entitled to rely upon the fiduciaries\u2019 good faith in discharging their duties without the need for this performance to be monitored.<\/p>\n While there is likely to be more detail and sophistication in any specific fiduciary interaction than what is described above\u2014particularly where the facts of an individual situation demand it\u2014the above portrayal establishes the basic parameters of a finding of fiduciary obligation. What is conspicuously absent, however, is any rationale or explanation of why the fiduciary duties exist and why their strict observation is necessary. While it is one thing to understand the implications of a finding of fiduciary obligation, ascertaining whether or not an interaction or person ought to be described as fiduciary, with the concomitant obligations provided by that description, is wholly another matter. Understanding the fiduciary concept requires not simply knowing its function, but also its purpose; a distinction explained by Chief Justice Laskin as \u201cbetween a purely formal, mechanical view of the law, antiseptic and detached, and a view of the law that sees it as purposive, related to our social and economic conditions, and serving ends that express the character of our organized society.\u201d[25]<\/a> Justice Frankfurter\u2019s judgment in Securities & Exchange Commission v. Chenery Corporation<\/em> recognizes this when he insightfully explains: \u201c[T]o say that a man is a fiduciary only begins analysis; it gives direction to further inquiry. To whom is he a fiduciary? What obligation does he owe as a fiduciary? In what respect has he failed to discharge these obligations? And what are the consequences of his deviation from duty?\u201d[26]<\/a> The identification of relationship fiduciarity and the associated application of fiduciary duties are what cause the greatest confusion and uncertainty in fiduciary jurisprudence.<\/p>\n The mutability of fiduciary principles allows for their application to a wide variety of disparate fact situations and equally broad variety of interactions, but simultaneously renders the fiduciary concept inimical to precise definition. Many have attempted to define the fiduciary concept,[27]<\/a> but capturing its true nature has remained elusive. The best explanation for the failure to formulate an adequate definition of the fiduciary concept rests, perhaps, in the recognition that the \u201cfiduciary\u201d concept is quite abstract and conceptual. As such, it is better understood through a functional description of its purpose (namely, what it does, why it does this, and how it does it), as well as the implications of its principles, rather than via traditional attempts at definition.<\/p>\n Fiduciary law facilitates a purposefully expansive understanding of the obligations existing between parties that is consistent with the importance of their interaction and transcends strict, common law limits. The fact that both the policy rationale underlying the fiduciary concept and the interests it protects are rather distinct from most of what exists under the common law helps to explain why the fiduciary concept cannot be conceptualized in the same manner as its common law counterparts.<\/p>\n Understanding the fiduciary concept, then, requires looking to the broad postulates that give it substance and the principles of equity from which they are derived. As the most doctrinally pure expression of equity,[28]<\/a> the fiduciary concept\u2019s equitable origins ought to be front and centre in any substantive discussion or analysis of its purpose and principles. Fiduciary law protects only those vital interactions of high trust and confidence resulting in one party\u2019s implicit dependency upon and peculiar vulnerability to another within defined parameters.[29]<\/a> It accomplishes this task by imposing strict duties on fiduciaries, including, importantly, requiring fiduciaries to act honestly, selflessly, with integrity, and in the best interests of their beneficiaries.[30]<\/a> The standard of care required of fiduciaries is the utmost good faith. As a result of this high standard and fiduciaries\u2019 requirement of selflessness, fiduciaries may not benefit themselves or third parties at the expense of their beneficiaries\u2019 interests that are tangibly related to the fiduciary nature of the parties\u2019 interaction.[31]<\/a> These prohibitions are enforced by the fiduciary rules against conflicts of interest.[32]<\/a><\/p>\n The fiduciary concept\u2019s foundation in broad and equitable notions of justice and conscience creates difficulty in defining \u201cthings fiduciary\u201d with any degree of precision. Fiduciary law\u2019s protean quality, which allows for its adaptation to the specific requirements of individual scenarios, produces similar problems. While these open-ended characteristics admittedly pose challenges for maintaining a sufficient level of certainty and predictability for juristic actors, the doctrinally-guided exercise of judicial discretion provides for the principled application of fiduciary principles. This is consistent with the fiduciary concept\u2019s origins in equity.<\/p>\n Equity works alongside the law, supporting it where it is deficient and enabling the law to adequately respond to the individual requirements of particular circumstances. It occupies a supplementary jurisdiction to the common law that supports and improves the latter without being inferior to it or lesser in importance.[33]<\/a> The development and situation-specific application of equitable principles humanizes and contextualizes the law\u2019s otherwise antiseptic nature, which makes the law more just. In accomplishing these diverse tasks, equity did not replace the common law, but maintained a conceptual separation from it, all the while harmonizing law with the needs and requirements of evolving social structures and relationships.<\/p>\n One of the primary ways in which the continued importance of equity is expressed in contemporary law is through the fiduciary concept. Fiduciary law\u2019s prescription of other-regarding behaviour allows certain individuals to trust that their interests will be cared for by others in various forms of fiduciary associations. However, trusting others leaves parties vulnerable to having their trust abused. Indeed, where one party holds power over another\u2019s interests, the latter may become vulnerable to the use, misuse, or abuse of that power. Fiduciary law\u2019s desire to promote interdependency and specialization consequently runs the risk of creating what Alison Grey Anderson has called \u201cdistorted incentives\u201d that may arise when specialists realize the personal benefits they can reap from abusing others\u2019 trust.[34]<\/a><\/p>\n These \u201cdistorted incentives\u201d are neutralized by the insertion of fiduciary principles that remove self-interest from its consideration. Relations appropriately characterized as fiduciary prevent those with power over others\u2019 interests from taking advantage of that power imbalance for self-benefit. Without the insertion of fiduciary principles, the trust that created the parties\u2019 interdependency would also be the likely cause of its destruction, as the failure to remove self-interest would see it abuse that trust.<\/p>\n It has often been suggested that fiduciary law exists to protect vulnerable beneficiaries from exploitation by their fiduciaries.[35]<\/a> Although some may suppose that the fiduciary concept\u2019s purpose is to protect the interests of beneficiaries from harm by their fiduciaries, a possible reason for this misapprehension is that the fiduciary concept\u2019s protection of relationships has the incidental effect of protecting those parties whose interests are vulnerable to being abused by others. Thus, while it may appear that the fiduciary concept exists to protect beneficiaries\u2019 interests, that effect is merely ancillary to its protection of fiduciary relationships.<\/p>\n While fiduciary norms furnish beneficiaries who entrust others within fiduciary interactions with the means to protect or abuse their interests, the fiduciaries entrusted by the beneficiaries are furnished with significant disincentives to abuse that trust.[36]<\/a> Fiduciaries\u2019 duties and beneficiaries\u2019 benefits thus offset each other to create an equilibrium that maintains the parties\u2019 fiduciary interactions by removing the threats of self-interest and mistrust that might otherwise undermine or destroy the relationship.<\/p>\n These correlative[37]<\/a> fiduciary duties and benefits exist because of the fiduciary concept\u2019s broader goal of preserving the integrity of the relationships in which these individuals participate (rather than protecting the individuals\u2019 rights). The fiduciary concept does not, however, protect all forms of interdependency. Where other means of civil obligation are both available and suitable to the task of regulating individual interactions, fiduciary law is not needed. It is only where the private law of contract, tort, or unjust enrichment is silent, inappropriate, or ineffective that fiduciary principles are used.<\/p>\n Fiduciary law protects important social and economic interactions of high<\/em> trust and confidence that create an implicit<\/em> dependency and peculiar<\/em> vulnerability of beneficiaries to their fiduciaries.[38]<\/a> While placing ordinary trust and confidence in others will create other forms of obligation, only high trust and confidence reposed within the context of the types of important social and economic relations contemplated above will give rise to fiduciary obligations.[39]<\/a> Fiduciary interactions rank among the most valuable in society by enhancing productivity and knowledge, facilitating specialization, and creating fiscal and informational wealth.[40]<\/a> To protect them, fiduciary law subordinates individual interests to its broader social and economic goals. Relationships, rather than individuals, are the primary concern of the fiduciary concept.[41]<\/a><\/p>\n To paraphrase George Keeton, the distinction between the common law and equity is not just historical, but attitudinal.[42]<\/a> Like the equitable principles that created it, the fiduciary concept is premised upon broader principles of fairness and justice than the common law and \u201csupplement[s] the general law with broader and theoretically based principles that more readily account for the idiosyncrasies of individual human interactions.\u201d[43]<\/a> Equity exists alongside the common law and informs and modifies it where necessary, yet maintains a conceptual separation from it. Equity extrapolates beyond the common law by instituting principles designed to provide context to judicial decision making. This facilitates law\u2019s ability to respond to disparate situations by emphasizing its spirit and intent.<\/p>\n I have previously described the core understanding of the fiduciary concept and the duties formulated around it as fiduciary law\u2019s \u201choly grail\u201d.[44]<\/a> These foundational fiduciary values include modes of behaviour that must be ascribed to by those holding power over the interests of others in certain socially- or economically-necessary or important interactions of high trust and confidence. The contents of the fiduciary \u201choly grail\u201d also contemplate the unique space inside which the fiduciary concept operates within the law of civil obligations, as well as the foundational goals that the fiduciary concept is designed to accomplish.<\/p>\n The section that follows outlines the \u201cessential fiduciary points of emphasis\u201d that illustrate what is necessary to the practical implementation of the fiduciary concept and what ultimately separates it from other legal doctrines (Part\u00a0II-A). This section seeks to render more concrete the more philosophical discussion of the fiduciary concept that preceded it. It does this by rooting the broad understanding outlined earlier in means and methodologies intended to provide substance to the fiduciary theory espoused, as explained through the principles applied to both fiduciaries and beneficiaries. This part then discusses the recent article by Remus Valsan on this topic (II-B) and questions whether perhaps the distinction brought by that article is one without a difference (II-C).<\/p>\n The overriding principle of the fiduciary concept is that fiduciaries must act in the best interests of their beneficiaries. Consequently, they must abnegate all self-interest, as well as the interests of third parties that interfere with their fiduciary obligations to their beneficiaries. Beneficiaries need not monitor their fiduciaries\u2019 performance of these duties.<\/p>\n Fiduciary law counterbalances individualistic ideas founded in contract, such as the \u201creasonable expectations of the parties\u201d and private ordering, by emphasizing broader social and economic goals that are consistent with the construction and preservation of interdependency. The fiduciary nature of a relationship describes both the law governing its existence as well as the bundle of rights and duties that stem from it. Fiduciary relationships are comprised of a series of associated duties and benefits. As indicated above, these relations only exist in a meaningful way because the parties\u2019 respective entitlements are enforced through fiduciary norms that create a rights-obligations \u201cequilibrium\u201d. Thus, as with Wesley Hohfeld\u2019s jural correlatives,[45]<\/a> when fiduciaries have duties to act with honesty, integrity, fidelity, and in the utmost good faith toward their beneficiaries\u2019 best interests, beneficiaries have correlative rights to rely upon their fiduciaries\u2019 fulfilment of these duties without having to inquire into or otherwise monitor the fiduciaries\u2019 activities. The integrity of the interaction is maintained by the fiduciaries\u2019 fidelity to their obligations. Beneficiaries have no obligations towards their fiduciaries in fiduciary interactions.<\/p>\n Fiduciaries\u2019 duties of integrity, loyalty, and selflessness require, inter alia<\/em>, that they act with the utmost good faith, make full and complete disclosure of relevant information affecting their beneficiaries\u2019 interests, avoid conflicts of interest, and not profit from information or opportunities gained while serving as fiduciaries. The latter prohibitions have traditionally been described as the \u201cno-conflict\u201d and \u201cno-profit\u201d rules. All of these duties attach to beneficiary interests that are tangibly related to the fiduciary interaction. This explains why fiduciaries must eschew any<\/em> correlative personal[46]<\/a> or third-party interests within the context of their fiduciary associations, regardless of whether those interests are complementary or antagonistic to their beneficiaries\u2019 interests.[47]<\/a> Any actions outside of those fiduciary interactions are not subject to fiduciary duties, even if they involve the same parties.[48]<\/a><\/p>\n Where a person possesses power over another, it is only a fiduciary power if it can be unilaterally exercised. Fiduciaries do not require permission to exercise fiduciary powers, nor are they under the authority of others with greater power absent a situation of permissible delegation. As with principal-agent relations, fiduciaries\u2019 authority is complete unless it has been restricted in some manner. Beneficiaries are, therefore, implicitly dependent upon and peculiarly vulnerable to their fiduciaries\u2019 use, misuse, or abuse of power over their interests. The unmitigated range of actions fiduciaries may undertake in exercising their powers and the potential for harm to their beneficiaries are what necessitated the creation and imposition of fiduciary obligations. The potential implications for beneficiaries explain why the fiduciary concept focuses exclusively upon fiduciaries\u2019 behaviour. The fiduciaries\u2019 use of their power, rather than anything their beneficiaries may do, dictates whether the integrity of the interaction in question is maintained.<\/p>\n The harsh sanctions levied against fiduciaries for failing to conform to the fiduciary concept\u2019s high standards may include, inter alia<\/em>, the disgorgement of profits or amounts equal to losses avoided, equitable compensation, a constructive trust, or the presumption of most advantageous use in calculating lost opportunities by a beneficiary wrongfully deprived of property.[49]<\/a> Fiduciary sanctions have a strong, exemplary quality to them, designed to deter fiduciaries from breaching their duties. Fiduciary relief is not necessarily punitive in nature, although it can be in appropriate circumstances. Its severity, however, facilitates beneficiaries\u2019 ability to rely upon their fiduciaries\u2019 good faith actions. This explains why the fiduciary concept prescribes other-regarding behaviour that looks beyond the limitations and immediacy of self-interest.[50]<\/a><\/p>\n Moreover, the fiduciary concept does not apply to all forms of interaction. Rather, it is needed only where there are compelling policy reasons, rooted in equity or statute, to preserve and reinforce the integrity, vitality, and value of certain forms of relationships.[51]<\/a> The strict duties imposed upon fiduciaries are substituted for the rules and mores of the marketplace. These strict standards\u2014including the reverse onus which causes fiduciaries to bear the burden of disproving prima facie demonstrations of fiduciary obligations and their breach[52]<\/a> and the notion that fiduciary obligations, once established, may transcend the active duration of fiduciary interactions[53]<\/a>\u2014are similarly designed to enforce the integrity of the fiduciary office.<\/p>\n In summary, the fiduciary concept applies to significant (i.e., more than fleeting), socially and economically important or necessary interactions of high trust and confidence to maintain the integrity and vitality of those associations. The fiduciary concept is used vis-\u00e0-vis these forms of interaction to preserve the interdependency necessary for the specialization that generates fiscal and informational wealth.[54]<\/a> The fiduciary concept applies only where fiduciaries possess power over their beneficiaries\u2019 interests that is materially related to the fiduciary element of their interaction and may exercise those powers without the beneficiaries\u2019 consent or the permission of others. In these circumstances, the beneficiaries become implicitly dependent upon or peculiarly vulnerable to the fiduciaries\u2019 use, non-use, or misuse of those powers.<\/p>\n In his recent contribution to the literature on fiduciary obligation, Remus Valsan focuses his attention primarily on fiduciaries\u2019 conflict of interest as the key to facilitating a better understanding of the fiduciary concept.[55]<\/a> While Valsan is neither the first nor the only commentator to focus on the importance of avoiding fiduciaries\u2019 conflicts of interest in order to maintain the integrity of fiduciary interactions and the proper discharging of fiduciaries\u2019 obligations thereunder, his discussion of fiduciary conflicts proposes a different point of emphasis than previous authors\u2019. In the discussion that follows, the parameters of Valsan\u2019s thesis are outlined and his discussion of conflict of interest is examined for its uniqueness and distinct approach from what has often been focused upon by others. The distinction between Valsan\u2019s suggested and more expansive approach to conflicts of interest is contrasted with more traditional attitudes toward both understanding and responding to fiduciaries\u2019 conflict. It is also examined with respect to its relationship to private law generally.<\/p>\n Valsan\u2019s characterization of what he describes as the \u201cdominant view\u201d of fiduciary duties suggests that fiduciary duties are designed to prevent fiduciaries from acting in self-interest in situations where they are obliged to facilitate their beneficiaries\u2019 best interests.[57]<\/a> This view creates problems, says Valsan, because he contends that discouraging fiduciaries\u2019 temptation to act in self-interest becomes enmeshed with the concepts of deterrence and vulnerability, both of which he maintains are \u201ctoo broad and too vague to be effective hallmarks of the fiduciary relationship.\u201d[58]<\/a><\/p>\n He then identifies what he describes as the two core elements of fiduciary relations found in recent fiduciary law jurisprudence: undertakings and discretion.[59]<\/a> The notion of requiring an undertakings in order to found a fiduciary relationship was recently sanctioned by the Supreme Court of Canada in two judgments: Galambos v. Perez<\/em>[60]<\/sup><\/a> and Alberta v. Elder Advocates of Alberta Society<\/em>.[61]<\/sup><\/a> These judgments entrenched the idea that fiduciary relations cannot exist without would-be fiduciaries\u2019 express or implied undertaking to act in another\u2019s best interests.[62]<\/a><\/p>\n Arguments in favour of the necessity of an undertaking to found fiduciary relationships have a relatively long history in academic analyses of the fiduciary concept.[63]<\/a> Nonetheless, the idea of requiring an undertaking remains controversial, particularly the idea of an \u201cimplied undertaking\u201d, which is an oxymoron. The reason for requiring an undertaking, presumably, is to clarify when fiduciary relations exist and to ensure that fiduciaries are fully aware of their obligations as fiduciaries. That rationale, however, would seem to require a more positive action and understanding on the part of a would-be fiduciary than an \u201cimplied undertaking\u201d could possibly provide, given the constructive nature of implying an undertaking.[64]<\/a><\/p>\n Aside from the issue of undertaking, Valsan focuses on the importance of fiduciaries\u2019 discretionary power to affect their beneficiaries\u2019 interests. While most commentators agree on the necessity of such discretion,[65]<\/a> Valsan properly recognizes that \u201cdiscretion\u201d is not interpreted consistently or uniformly. This discrepancy in interpretation applies both to the meaning and content of discretion, as well as how fiduciaries control it.[66]<\/a><\/p>\n As Valsan explains, \u201cSome scholars equate discretion with opportunities to cheat or to exploit other people\u2019s vulnerability, or with enlarged scope for fiduciaries to breach non-fiduciary duties.\u201d[67]<\/a> However, he regards these situations as being limited to removing fiduciaries\u2019 temptations to use their powers to obtain improper benefits. He suggests this purpose is incorrect, insofar as deciding whether or not to misappropriate property, or opportunities belonging to another, is not the exercise of discretion contemplated by fiduciary law. Rather, he states that fiduciaries exercising discretion refers to their abilities to make decisions on their beneficiaries\u2019 behalves, which includes the ability to decide from among a range of permissible options.[68]<\/a> Thus, fiduciary discretion, in Valsan\u2019s conceptualization, entails the authority to exercise decision-making power only to promote a beneficiary\u2019s interest. As he states, \u201c[T]he requirement of power is best understood as decision-making authority.\u201d[69]<\/a><\/p>\n While Valsan makes some important points, his focus only on positive actions undertaken by fiduciaries renders his characterization too restrictive, and inaccurately so. The use of fiduciaries\u2019 discretion, where it exists, is not restricted only to one element of that discretion. Discretion may exist regarding a wide variety of issues or it may not exist at all. Moreover, while a fiduciary\u2019s exercise of discretion is important, it is not at all necessary for a fiduciary to possess discretion over a beneficiary\u2019s interests for that person to be a fiduciary vis-\u00e0-vis the beneficiary.[70]<\/a> The example of a bare trustee is, perhaps, the most obvious example of a situation in which a fiduciary has power, but no discretion, over a beneficiary\u2019s interests.[71]<\/a> The bare trustee is, however, undeniably still a fiduciary and remains subject to fiduciary obligations.<\/p>\n What is the purpose of providing fiduciaries with discretion? Fiduciaries\u2019 discretion gives them the ability to determine how, when, and whether to exercise their powers, both for good and ill.[72]<\/a> Consequently, where it exists, this discretion is not limited to the exploitation of vulnerability. Where a fiduciary\u2019s discretion is limited, it is limited in respect of the fiduciaries\u2019 powers, such as having the discretionary power to invest, not vis-\u00e0-vis the effects of using that power. Meanwhile, the exploitation of vulnerability is not the same thing as the exercise of a fiduciary\u2019s discretion. The exploitation of a beneficiary\u2019s vulnerability is a consequence of the fiduciary\u2019s exercise of a particular power or the manner in which the fiduciary chooses to implement, or not, the power in question. In other words, a beneficiary\u2019s vulnerability may be exploited by the fiduciary\u2019s non-use, or non-consideration, of fiduciary powers just as it may be by the misuse or abuse of those powers. For these reasons, the distinction Valsan draws is an artificial one the purpose of which is uncertain.<\/p>\n Fiduciaries\u2019 power over the beneficiaries\u2019 interests, not their discretion, is what creates the latter\u2019s implicit dependency upon and peculiar vulnerability to the former.[73]<\/a> That vulnerability is not absolute, however, in the sense that it does not exist vis-\u00e0-vis all elements of the interaction between fiduciary and beneficiary, but only within the fiduciary elements of their interaction. It is well understood that not all aspects of a fiduciary relationship are, themselves, fiduciary.[74]<\/a> For example, while a physician may hold fiduciary duties regarding a patient\u2019s health and well-being, the physician does not owe fiduciary duties regarding any stock tips given to a patient or may bill the patient for health services rendered in circumstances where such is permitted, notwithstanding that the patient\u2019s best interests would be to receive the services free of charge.<\/p>\n In describing the content of fiduciary duties, Valsan separates them into narrow and broad conceptualizations found in jurisprudential and academic analyses.[75]<\/a> In their narrow conceptualization, he suggests that fiduciary duties are restricted to the prophylactic duties forbidding fiduciaries from profiting from their positions as fiduciaries or where their personal interests or those of a third-party conflict, or potentially conflict, with their duty to their beneficiaries. These circumstances comprise what is commonly known as the no-profit rule and the no-conflict rule. No other forms of fiduciary duties exist in this conceptualization.[76]<\/a><\/p>\n Under the broad conceptualization of fiduciary duty content, the no-profit rule and the no-conflict rule are joined by other obligations, like the duty to act in good faith\u2014which some describe as the \u201cduty of loyalty\u201d[77]<\/a>\u2014and the duty to maintain confidences. Valsan rejects this broader conceptualization of fiduciary duty as inappropriate, insofar as \u201cit fails to identify a core feature or duty that applies only to fiduciary positions.\u201d[78]<\/a> While fiduciaries possess a variety of duties, some are unique or peculiar to the fiduciary position while others are more generic (and, hence, not \u201cfiduciary duties\u201d even though they are performed by a fiduciary).[79]<\/a> However, the duty of good faith that Valsan mentions may or may not be properly classified as a fiduciary duty.<\/p>\n In the context of fiduciary law, fiduciaries do not owe duties of good faith, but, rather, have duties to act with the utmost<\/em> good faith in the best interests of beneficiaries.[80]<\/a> Ordinary duties of good faith exist in many areas of the law, although they are particularly associated with contracts. The Supreme Court of Canada has clarified that contract law contains a foundational duty of good faith that applies to all contracting parties in Bhasin<\/em> v. Hrynew<\/em>[81]<\/a> (Bhasin<\/em>). If Valsan meant to reference utmost good faith, however, it is a proper characterization of the nature and scope of fiduciaries\u2019 duties, but it does not create a special duty in and of itself. The duty of utmost good faith must be articulated in respect of a particular action, like investment, or fetching an appropriately high price for the sale of an asset.<\/p>\n Valsan rejects the narrow and broad approaches in favour of a middle ground he identifies that separates fiduciaries\u2019 duties into two groups: the traditional duties comprised of the no-conflict and no-profit rules and a core fiduciary duty of loyalty. The latter is said to be distinct from the no-conflict and no-profit rules and justifies their existence, but connects those negative rules by putting them to use to prevent violations of fiduciaries\u2019 fundamental duties.[82]<\/a> The core fiduciary duty is purpose-driven and exists to ensure fiduciaries act appropriately in discharging their traditional duties. While Valsan asserts that this middle-ground approach is \u201cthe only approach that can provide a cogent understanding of fiduciary relationships,\u201d he also indicates that existing theories of this core fiduciary duty \u201cfall outside of the dominant understanding of the content of fiduciary duties\u201d which is why the idea of a connecting core fiduciary duty is generally not as accepted a part of fiduciary duties as the no-conflict and no-profit rules.[83]<\/a> This is where he views his article\u2019s primary contribution to the fiduciary law literature.<\/p>\n Valsan contends that fiduciaries\u2019 duties to \u201cexercise judgment based on relevant considerations\u201d ought to be regarded as the core fiduciary duty. By exercising judgment based solely on relevant considerations, Valsan maintains that fiduciaries will ensure their ability to properly discharge the traditional no-conflict and no-profit rules that protect their beneficiaries\u2019 interests. His article attempts to demonstrate the wisdom of his conceptualization of fiduciary duty by \u201c[r]elying on an interdisciplinary view of conflicts of interest … [to] show that the \u2026 no-conflict and no-profit duties protect the duty to exercise judgment based on relevant considerations.\u201d[84]<\/a> Where his approach differs from existing theories is that rather than having the core fiduciary duty facilitate the traditional no-conflict and no-profit rules, Valsan turns that approach on its head and suggests that the no-conflict and no-profit rules facilitate the core fiduciary duty to exercise judgment based on relevant considerations.[85]<\/a><\/p>\n One cannot help but feel that, despite his best intentions, Valsan ends up obfuscating rather than clarifying the understanding of fiduciaries\u2019 duties by introducing, as the \u201ccore\u201d fiduciary duty, a concept that is not necessarily fiduciary at all. Indeed, fiduciaries are not the only individuals obliged to exercise judgment based on relevant considerations: principles of adjudication and administrative fairness also require judges and other adjudicators to render decisions solely on the basis of relevant considerations. Moreover, not all of the situations in which individuals have such a duty are, or necessarily have to be, fiduciary. This analysis causes Valsan\u2019s assertion of the core fiduciary centrality of the duty to exercise judgment based on relevant considerations to fall into the same trap that he criticizes the broad approach to fiduciary duties for not avoiding. Describing the process of exercising judgment based on relevant considerations as a \u201cduty\u201d rather than seeing it as basic common sense does not somehow elevate it to something unique or peculiar to the fiduciary concept. Consequently, based on his own reasoning, it is difficult to see how the duty to exercise judgment based on relevant considerations can be the core feature of fiduciary interactions.<\/p>\n There also appears to be a circularity to Valsan\u2019s argument regarding the core duty. Initially, he states the need to better demonstrate why the traditional and strict no-conflict and no-profit rules connect with the core fiduciary duty of loyalty to prevent violations of that core duty. He suggests that the reason for this connection is the duty to exercise judgment based on relevant considerations. He then, however, states that this duty is, itself, the core fiduciary duty. If the duty to exercise judgment based on relevant considerations is the basis for connecting the no-conflict and no-profit rules to the core fiduciary duty, how can it also be that core duty? In other words, how can the duty to exercise judgment based on relevant considerations be both the tool that connects the no-conflict and no-profit rules with the core fiduciary duty, but also be that core duty?<\/p>\n Additionally, what is the difference between having the no-conflict and no-profit rules facilitate the core fiduciary duty, as he suggests, rather than having the core duty ensure the discharging of the no-conflict and no-profit rules? The end result, certainly, is the same. The primary difference, it would appear, is what gets characterized as the \u201ccore\u201d fiduciary duty. Insofar as it does not appear that these differences in characterization lead to different outcomes, it may well be that Valsan\u2019s argument over what lies at the core of fiduciary duties is a distinction without a difference.<\/p>\n Rather than focusing on the conflict between fiduciaries\u2019 self-interest, their duties to their beneficiaries\u2019 best interests, and how to address or avoid these situations, Valsan contends that fiduciary conflicts of interest need to be wholly reimagined so they are understood for what fiduciary law ought truly to be concerned with. This is where he indicates his departure from traditional emphases on fiduciary conflicts of interest and the strict adherence to the no-conflict and no-profit rules that, he maintains, do not properly capture where fiduciaries\u2019 conflicts of interest lie.<\/p>\n Valsan defines a conflict of interest as \u201ca situation in which a person, who has a duty to exercise judgment for the benefit of another, has an interest that tends to interfere with the proper exercise of her discretion.\u201d[86]<\/a> Valsan emphasizes the impairment of fiduciaries\u2019 ability to properly exercise discretion on behalf of their beneficiaries. He suggests that this impairment of fiduciaries\u2019 judgment and discretion is the real reason why conflicts of interest need to be prevented. The difficulty with conflicts of interest, however, is that they \u201caffect the reliability of the decision maker\u2019s judgment in ways that cannot be measured or corrected adequately.\u201d[87]<\/a> In this way, their impact on decision makers are not always known to decision makers to allow them the opportunity to step down or away from a situation of conflict. Even if the existence of conflicts is known, Valsan stresses that the manner in which conflicts operate may prevent decision makers from making appropriate decisions as to their conflict.<\/p>\n Valsan argues that in relations where one party has discretionary power or authority over another\u2019s interests, the strict proscriptive duties are necessary to ensure that the exercise of discretion is not influenced, whether directly or subconsciously, by the prospect of self-interest. Further, fiduciary duties against conflicts must be strict in order \u201cto prevent self-interest or other-regarding interests from interfering with the fiduciary\u2019s core duty to exercise judgment based on relevant considerations.\u201d[88]<\/a> Thus he suggests that the existence of proscriptive fiduciary duties \u201cprotect[s] the beneficiary\u2019s right to the fiduciary\u2019s best judgment by preventing self-interest or other-regarding interests from interfering with the fiduciary\u2019s proper exercise of judgment.\u201d[89]<\/a><\/p>\n Valsan states that the conflict of interest formulation he establishes in his article provides a \u201csound explanation for the peculiar harshness of fiduciary duties.\u201d[90]<\/a> Meanwhile, he stresses that his argument in favour of the need for strict application of fiduciary duties is premised upon a more precise understanding of \u201cconflict of interest\u201d than traditional formulations of conflicts are.[91]<\/a> In his view, the understanding of fiduciary conflicts of interest he promotes also justifies the strict enforcement preventing fiduciaries\u2019 conflicts of interest. These are the reasons why conflicts of interest comprise the major focus in his article.<\/p>\n Valsan\u2019s discussion of conflicts of interest provides important context and perspective to conceptualizing a fiduciary\u2019s obligations while addressing one of the vital considerations of relationship fiduciarity. It provides access to specific examples of interdisciplinary literature on conflicts of interest that have generally not made their way into mainstream fiduciary law discussions. This is a definite contribution to any serious examination of the fiduciary concept and clarifies some long-held misconceptions about conflicts of interest, not solely in the fiduciary context.<\/p>\n Yet, focusing on conflicts of interest provides only a partial glimpse of the fiduciary picture. An article purporting to provide \u201ca more persuasive rationale for the strictness of fiduciary liability,\u201d[92]<\/a> needs to be more ambitious and cannot focus solely on conflicts of interest. There are far more fundamental, and foundational, reasons why the fiduciary concept was created by equity; these are revealed by an examination of the relevant jurisprudence. In limiting the scope of his examination to conflicts, Valsan inhibits his ability to provide the greater-reaching impact for his article that he, himself, suggests. That is neither a fault of his research, nor is it because conflicts of interest are not prominent in discussions of fiduciary liability. Rather, it is because conflicts are merely an effect, rather than a cause, of fiduciary liability.<\/p>\n Conflicts of interest are one of the primary outcomes of relationship fiduciarity that fiduciary law attempts to both address and avoid. However, there are more substantial\u2014and foundational\u2014reasons why fiduciary liability is as strict as it is. Indeed, discussing the strictness and severity of fiduciaries\u2019 liability necessitates a discussion of the unique purpose and function of the fiduciary concept. Liability does not exist in a vacuum and differs according to the theoretical basis upon which it is initially established. Remedies properly flow from and have a direct correlation with the rights from which they originate.[93]<\/a> For this reason, there are different remedial considerations for different forms of obligations. A prime example of this may be seen in the distinction between common law and equitable remedies, which are often just as distinct from one another as common law causes of action are from equitable causes of action.[94]<\/a><\/p>\n Without understanding why the fiduciary concept exists, the rationale underlying the strict application of its principles or the breadth of its expansive modes of relief lacks a context in which to make sense of them. The uniqueness of the fiduciary concept stems from its equally unique focus on considerations that are not part of the vision of other bases of civil liability. Yet, Valsan does not engage in a discussion of this important distinction.<\/p>\n What is also noteworthy about Valsan\u2019s approach to fiduciaries\u2019 conflicts of interest is his insistence that the strictness with which the no-conflict and no-profit rules have traditionally been applied to deter fiduciaries is \u201ccounterintuitive\u201d and may not be reconciled \u201cwithin many influential frameworks of private law.\u201d[95]<\/a> The basis for this contention is uncertain. Yet, it is quite relevant to assessing the veracity of his overall approach and argument, insofar as it ignores the unique status of the fiduciary concept vis-\u00e0-vis other forms of private law.<\/p>\n What is the reason why Valsan claims that traditional formulations of conflicts of interest are irreconcilable with many influential frameworks of private law? Does it add anything to our understanding of the between the fiduciary concept and conflicts of interest? Valsan\u2019s claim is troubling because it attempts to draw an analogy between things that are not properly analogous. As discussed in Part\u00a0I, the fiduciary concept is not at all like other elements of private law: it has an entirely distinct and broader function than other spheres of private law. The fiduciary concept exists to maintain the integrity of socially and economically important or necessary interactions of high trust and confidence. This purpose is far more ambitious than other elements of private law, which are primarily focused on promoting justice between individual parties. The fiduciary concept\u2019s more broad-based purpose provides ample justification for the strict rules imposed on fiduciaries to maintain the integrity of fiduciary interactions.[96]<\/a> Such strict rules are not required of less ambitious motivations. Consequently, to state that most existing theories of fiduciary interaction \u201cdo not offer persuasive explanations as to why<\/em> the core fiduciary duty requires the special protection of the prophylactic duties\u201d[97]<\/a> is incorrect.<\/p>\n Valsan expressly acknowledges that \u201c[p]rivate law focuses primarily on the bilateral relationship between two legal subjects.\u201d He suggests, however, that it does not concern itself with \u201cthe interests of the community as a whole.\u201d[98]<\/a> For the most part, this assertion is correct, as most elements of private law do not focus on community interests. The fiduciary concept, however, differs from other private law concepts precisely because it does focus <\/em>on these broader community interests rather than concerning itself with the interests of individual parties. Thus, while under Valsan\u2019s conceptualization it makes sense to treat fiduciary duties no differently than other private law duties\u2014because he asserts that there is no fundamental distinction in purpose between them\u2014that vision is premised upon a misunderstanding of the foundational purpose of the fiduciary concept as being individually-based rather than community-based or relationship-based.<\/p>\n While not all theories of the fiduciary concept regard it as being premised on this larger societal motivation,[99]<\/a> most fiduciary commentators understand the fiduciary concept to be unlike other forms of private law. If such is the case and the fiduciary concept\u2019s function is so unlike other forms of private law, there would appear to be no reason to suggest, as Valsan does, that the fiduciary concept ought to be reconcilable with influential frameworks of private law that concentrate primarily on doing justice between individual parties and have no larger societal function. If anything, it would be logical to assume that the fiduciary concept would not be reconcilable<\/em> with the private law theories he references precisely because the latter focus on areas of law that have a fundamentally distinct focus from that of the fiduciary concept.<\/p>\n Valsan spends considerable time in his article demonstrating how early fiduciary jurisprudence from the time of Keech <\/em>established the prophylactic rules against conflicts of interest and prohibited inquiries into fiduciaries\u2019 motivations in favour of the blanket rule forbidding conflicts. While part of the initial motivation for the blanket prohibition on inquiring into fiduciaries\u2019 motivations for acting in conflict of interest was based on the perceived difficulty of ascertaining fiduciaries\u2019 motivations, which is a notion I have previously criticized,[100]<\/a> the true basis for the rule is the need to enforce the strictness of fiduciaries\u2019 duties to maintain the integrity of the important relationships the fiduciary concept was designed to protect.[101]<\/a> The prophylactic rule against conflicts accomplishes this task by outright prohibiting fiduciaries from attempting to finesse characterization of their questionable actions or justifying conduct that departs from the fiduciary standard.<\/p>\n The prophylactic rule against conflicts informs fiduciaries that only actions that are clearly in the best interests of their beneficiaries will be acceptable. It serves as a warning to fiduciaries that they must ascribe to onerous standard of selflessness. The strictness of the rule also ensures that beneficiaries can comfortably rely on their fiduciaries\u2019 fidelity to their interests as beneficiaries. The combination of these assurances maintains the integrity of the important relationships that the fiduciary concept was designed to protect.<\/p>\n Early fiduciary jurisprudence, dating all the way back to Walley v. Walley<\/em>[102]<\/a> (Walley<\/em>) and Keech<\/em> indicates that judicial investigations into allegations of the breach of fiduciary duty should look both to actual and potential<\/em> harm and abuse of beneficiaries\u2019 interests.<\/p>\n In Keech<\/em>, the lessee of the rights to a market in Rumford, a town a dozen miles east of London, died and left those rights in trust for an infant. Before the lease came up for renewal, the trustee of the lease sought to renew it in favour of the infant, but the lessor refused these overtures.[103]<\/a> When the lease subsequently expired, the trustee obtained a new lease of the market for himself. An action was subsequently brought on behalf of the infant against the trustee for an assignment of the lease and an accounting of profits obtained by the trustee from the lease.<\/p>\n In his defence, the trustee testified that he took up the lease for himself only because the lessor had refused to renew it for the infant\u2019s benefit. In finding that the trustee held the renewal of the lease for the infant and that any profits earned from the trustee\u2019s possession of the lease be disgorged, Lord Chancellor King determined that the nature of the trustee\u2019s position prohibited him from personally obtaining the benefit of the lease, notwithstanding the lessor\u2019s refusal to renew it for the infant\u2019s benefit. As he explained:<\/p>\n This may seem hard, that the trustee is the only person of all mankind who might not have the lease: but it is very proper that rule should be strictly pursued and not in the least relaxed; for it is very obvious what would be the consequence of letting trustees have the lease, on refusal to renew to cestui que <\/em>use.[104]<\/a><\/p>\n The decision in Keech<\/em> is not premised upon the demonstration of actual fraud, or even wrongful activity, but simply on the potential for such actions. As the Lord Chancellor indicated: \u201c[I]f a trustee, on the refusal to renew, might have a lease to himself, few trust-estates would be renewed to cestui que<\/em> use; though I do not say there is a fraud in this case, yet he [the trustee] should rather have let it run out, than to have had the lease to himself.\u201d[105]<\/a><\/p>\n Joseph Story cites Walley<\/em>, a case with essentially similar facts to those of Keech <\/em>and decided on the same basis, although not nearly as eloquently, by Lord Chancellor Jeffreys,[106]<\/a> as an example of a situation where equity will grant relief where a bargain is flagrantly against conscience or equally unreasonable and oppressive. Equity grants this relief even in situations where actual fraud is not proven, but where the nature of the parties\u2019 relationship places it under the law\u2019s protection. As Lord Chancellor Jeffreys states:<\/p>\n … the proper jurisdiction of courts of equity is to take every one\u2019s act, according to conscience, and not to suffer undue advantage to be taken of the strict forms of law, or of positive rules. Hence it is, that, even if there be no proof of fraud or imposition; yet, if upon the whole circumstances, the contract appears to be grossly against conscience, or grossly unreasonable and oppressive, courts of equity will sometimes interfere and grant relief; although they certainly are very cautious of interfering, unless upon very strong circumstances. … And indeed it will be found that there are very few cases not infected with positive or actual fraud, in which they do interfere, except where the parties stand in some very peculiar predicament, and in some sort, under the protection of the law, from age, or character, or relationship.[107]<\/a><\/p>\n The idea of stringently prohibiting both actual and potential conflicts of interests, while quite strict, is necessary to maintain the integrity and viability of fiduciary interactions. By virtue of their relative positions of power vis-\u00e0-vis their beneficiaries and control of information related thereto, fiduciaries possess a particular ability to conceal improper or fraudulent activity that is contrary to their fiduciary duties of selflessness and utmost good faith. No less prophylactic a sanction than prohibiting actual and potential conflicts of interest outright may provide as immutable and appropriate protection for the type of intimate and trusting relations that exist in fiduciary interactions. This proposition helps to explain why Lord Chancellor King\u2019s judgment in Keech <\/em>renders the trustee \u201cthe only person of all mankind who might not have the lease,\u201d[108]<\/a> notwithstanding the absence of proof of fraud or bad faith. For a judgment to make this kind of strict decree, yet maintain a lasting effect for almost four hundred years, it is safe to presume that Lord Chancellor King\u2019s prescription is not only correct, but necessary, and beyond questioning.<\/p>\n Because of the necessity of so strictly prohibiting conflicts of interest in both Walley<\/em> and Keech<\/em>, the presence of mala fide<\/em> activity is irrelevant. Fiduciaries vested with authority over the interests of their beneficiaries are prohibited from taking advantage of their positions[109]<\/a> to further interests belonging to anyone other than their beneficiaries. This proposition holds true regardless of fiduciaries\u2019 intent and even where those other interests are congruent with, or at least not antagonistic to, the beneficiaries\u2019 interests. The rationale for this strict prohibition stems from the danger inherent in allowing fiduciaries to contemplate interests other than those of their beneficiaries for any reason.<\/p>\n Some years after Walley<\/em> and Keech<\/em>, Lord Eldon attempts to explain the rationale underlying the strict prohibition of actual and potential conflicts of interest in his notable judgment in Ex parte Lacey<\/em>, where he states that this reasoning:<\/p>\n is founded upon this; that, though you may see in a particular case, that [the trustee] has not made advantage, it is utterly impossible to examine upon satisfactory evidence in the power of the Court, by which I mean, in the power of the parties, in ninety-nine cases out of an hundred, whether he has made advantage, or not.[110]<\/a><\/p>\n Lord Eldon reiterates this sentiment in Ex parte James<\/em> by stating \u201cno Court is equal to the examination and ascertainment of the truth in much the greater number of cases.\u201d[111]<\/a> In addition to illustrating the strictness of the no-conflict rule, these statements also indicate that courts will not inquire into the subjective motivations of fiduciaries, but focus only on the existence of a breach of duty.<\/p>\n A similar result may be found in Parker v. McKenna<\/em>[112]<\/a> (Parker<\/em>), a case concerning profits made by directors of a joint-stock bank from shares issued under a scheme alleged to have been perpetrated for their personal benefit rather than the bank\u2019s. In his judgment, Lord Cairns states that, \u201cThe Court will not inquire, and is not in a position to ascertain, whether the bank has lost or not lost by the acts of the directors.\u201d[113]<\/a> Similarly, as Lord Justice James emphasizes in the same case, \u201c[T]he safety of mankind requires that no agent shall be able to put his principal to the danger of such an inquiry as that.\u201d[114]<\/a> Many years later, an analogous sentiment may be found in the Australian High Court\u2019s judgment in Furs Ltd v. Tomkies<\/em>:<\/p>\n … the inflexible rule [is] that, except under the authority of a provision in the articles of association, no director shall obtain for himself a profit by means of a transaction in which he is concerned on behalf of the company unless all the material facts are disclosed to the shareholders and by resolution a general meeting approves of his doing so, or all the shareholders acquiesce. An undisclosed profit which a director so derives from the execution of his fiduciary duties belongs in equity to the company. It is no answer to the application of the rule that the profit is of a kind which the company could not itself have obtained, or that no loss is caused to the company by the gain of the director. It is a principle resting upon the impossibility of allowing the conflict of duty and interest which is involved in the pursuit of private advantage in the course of dealing in a fiduciary capacity with the affairs of the company. If, when it is his duty to safeguard and further the interests of the company, he uses the occasion as a means of profit to himself, he raises an opposition between the duty he has undertaken and his own self interest, beyond which it is neither wise nor practicable for the law to look for a criterion of liability. The consequences of such a conflict are not discoverable. Both justice and policy are against their investigation.[115]<\/a><\/p>\n From these cases, the strict prohibition against conflicts of interest is explained by the courts\u2019 inability to ascertain the precise nature of the breach and the factors involved. Although the prophylactic rule against a fiduciary\u2019 conflict of interest importantly remains in effect, subject to very limited exceptions, the rationale for its existence expressed in Ex parte Lacey<\/em>, Ex parte James<\/em>, and Parker <\/em>inaccurately explains the underlying basis for the rule. The motivation for the prophylactic rule is not the result of judges being unable to meet the evidentiary challenge of making determinations where the facts are often prohibitively difficult to ascertain\u2014i.e., ascertaining the subjective knowledge of a fiduciary. As seen in Lord Justice Bowen\u2019s graphic portrayal of the issue in Edgington v. Fitzmaurice<\/em>, \u201cThe state of a man\u2019s mind is as much a fact as the state of his digestion.\u201d[116]<\/a><\/p>\n Indeed, there are many situations in which the law must make findings of fact or intent where those are not expressly known from the facts or witnesses and the person or persons with express knowledge of the circumstances are either unavailable or not talking. A classic example exists in criminal law, where a court, based on the evidence offered up by the prosecution, must establish that an accused possesses the requisite mens rea<\/em> to commit a serious crime such as murder without necessarily being able to hear directly from the accused. Indeed, that system has managed to maintain itself on this basis for a significant period of time, which demonstrates that law is capable of ascertaining the state of a person\u2019s mind if it needs to do so. So, if the reason for the strict, prophylactic rule against conflict of interest does not exist because of an inability to determine the state of a person\u2019s mind, why does it exist?<\/p>\n The rationale behind the strict rule against fiduciaries\u2019 conflicts stems from the fact that the potential for fiduciaries\u2019 self-interested or opportunistic behaviour at the direct expense of their beneficiaries is so great that it must be prohibited regardless of fiduciaries\u2019 good faith, lack of bad faith, or other reasons that might serve to excuse the behaviour in question. As Lord Justice Russell explains in the English Court of Appeal\u2019s judgment in Phipps v. Boardman<\/em>, the rigidity of the no-conflict rule \u201cis necessary if cases deserving of no sympathy are not to escape.\u201d[117]<\/a><\/p>\n A good summary of the dictates of the strict fiduciary standard of conduct may be seen in the United States Supreme Court\u2019s judgment in Pepper v. Litton<\/em>. That case concerns the duties owed by the manager of an insolvent corporation to its creditors. In it, the Supreme Court reiterates many of the principles discussed above:<\/p>\n He who is in such a fiduciary position cannot serve himself first and his cestuis<\/em> second. He cannot manipulate the affairs of his corporation to their detriment and in disregard of the standards of common decency and honesty. He cannot by the intervention of a corporate entity violate the ancient precept against serving two masters. He cannot by the use of the corporate device avail himself of privileges normally permitted outsiders in a race of creditors. He cannot utilize his inside information and his strategic position for his own preferment. He cannot violate rules of fair play by doing indirectly through the corporation what he could not do directly. He cannot use his power for his personal advantage and to the detriment of the stockholders and creditors no matter how absolute in terms that power may be and no matter how meticulous he is to satisfy technical requirements. For that power is at all times subject to the equitable limitation that it may not be exercised for the aggrandizement, preference, or advantage of the fiduciary to the exclusion or detriment of the cestuis<\/em>. Where there is a violation of those principles, equity will undo the wrong or intervene to prevent its consummation.[118]<\/a><\/p>\n What these judicial affirmations of the strictness of the prohibition against fiduciaries\u2019 conflict of interest demonstrate is that the idea of enshrining a prophylactic rule was not without constant scrutiny over more than two hundred years. It was intentionally designed as a necessary means of ensuring the fiduciary concept\u2019s ability to maintain the integrity of the relationships of high trust and confidence it was designed to protect and that are essential to the effective interdependent operation of post-industrial society.[119]<\/a> Removing the fruit rather than simply placing it on a higher shelf has long been seen to be necessary to fully eliminate fiduciaries\u2019 temptation to contravene their duties to their beneficiaries;[120]<\/a> this, in turn, ensures beneficiaries\u2019 continued ability to rely upon their fiduciaries\u2019 good faith actions. As Justice Johnson indicates to this effect in Wormley v. Wormley<\/em>, \u201cThere are canons of the Court of equity which have their foundation not in the actual commission of fraud, but in that hallowed orison, \u2018lead us not into temptation.\u2019\u201d[121]<\/a><\/p>\n Prior to the judgments referenced above, beneficiaries had reason for concern that the fiduciaries they relied upon to facilitate their best interests could succumb to temptations to utilize their authority and power for improper purposes. The harshness of the prophylactic rule against conflicts of interest that was devised to protect against this possibility was thus a necessary evil; it was determined that any lesser standard would be inadequate to provide the level of protection necessary to ensure the continuation of such important interactions and reassure beneficiaries that their interests were being taken care of. The importance of this judicial supervision of fiduciary interactions is referenced in Billage v. Southee<\/em>, where it is said that, \u201cNo part of the jurisdiction of the Court is more useful than that which it exercises in watching and controlling transactions between persons standing in a relation of confidence to each other.\u201d[122]<\/a><\/p>\n The prohibition on inquiring into the reason for fiduciaries\u2019 actual or potential conflicts of interest is not unique to the context of fiduciary law. Fiduciary law does not necessitate either that courts inquire into the reason for fiduciaries\u2019 conflicts of interest to determine whether a fiduciary relationship exists or to uphold fiduciaries\u2019 duties toward their beneficiaries. While the fiduciary concept places particular importance on the specific facts of individual situations and the precise nature of the interaction between the parties, assessments of important matters\u2014such as whether a fiduciary relationship exists or if there has been a conflict of interest\u2014are premised entirely on objective standards that generally have few, if any, exceptions. This objective standard of assessment explains why fiduciary law does not concern itself with fiduciaries\u2019 subjective motivations for their actions; whether they have acted in good or bad faith; if beneficiaries have suffered actual harm or loss, or; whether the fiduciaries or beneficiaries have earned profit from the actions in question.[123]<\/a><\/p>\n The focus in these inquiries, then, revolves solely around what actually occurs in the relationship between fiduciary and beneficiary rather than the reason or reasons why it occurred. A breach of fiduciary duty is a breach of fiduciary duty, regardless of why it occurred or whether there are subjective reasons for this breach that are alleged to justify it or mitigate its severity. Breaching a fiduciary duty is not a question of degree: it is a binary definition[124]<\/a>\u2014either a breach has occurred or it has not.[125]<\/a> The following illustration of a breach of ethics demonstrates the impact of this analysis.<\/p>\n In the movie Wall Street<\/em>,[126]<\/a> aspiring junior stock broker Bud Fox seeks to make his fortune and is willing to subordinate his morality to do so. He relentlessly pursues and ultimately meets and falls under the influence of corporate raider Gordon Gekko. Under a direction from Gekko, he pushes stocks in a company called Anacott Steel; Gekko hopes to manipulate the company\u2019s share price by orchestrating a \u201cpump and dump\u201d.[127]<\/a> When Bud informs his senior broker, Lou Mannheim, to have his clients purchase shares in Anacott Steel to commence the \u201cpump and dump\u201d, he receives a lecture from Lou about the impact of taking shortcuts:<\/p>\n \u00a0\u00a0\u00a0\u00a0\u00a0 Bud<\/strong>: Lou, I got a sure thing. Anacott Steel.<\/p>\n \u00a0\u00a0\u00a0\u00a0\u00a0 Mannheim<\/strong>: No such thing except death and taxes. No fundamentals, not a good company any more. What\u2019s going on, Bud? You know something? Remember there are no shortcuts, son. Quick buck artists come and go with every bull market, but the steady players make it through the bear market. You\u2019re a part of something here, Bud. The money you make for people creates science and research jobs. Don\u2019t sell that out.<\/p>\n \u00a0\u00a0\u00a0\u00a0\u00a0 Bud<\/strong>: You\u2019re right, Lou, you\u2019re right. But you gotta make it to the big time first, then you can be a pillar and do good things.<\/p>\n \u00a0\u00a0\u00a0\u00a0\u00a0 Mannheim<\/strong>: You can\u2019t get a little bit pregnant, son.<\/p>\n \u00a0\u00a0\u00a0\u00a0\u00a0 Bud<\/strong>: Lou, trust me, it\u2019s a winner. Buy it.[128]<\/a><\/p>\n Just as Lou tells Bud \u201cYou can\u2019t get a little bit pregnant,\u201d a fiduciary\u2019s actions either cause a breach of fiduciary duty or they do not. There is no such thing as a partial breach of fiduciary duty.[129]<\/a><\/p>\n Determining the existence of a breach of duty is what generates fiduciaries\u2019 liability. Assuming the fiduciary is unable to successfully defend against an allegation of breach of duty,[130]<\/a> any subjective motivations or justifications for the act deemed to constitute a breach may only come into play in determining appropriate measures of relief for the breach of duty.<\/p>\n Valsan\u2019s contention that there is no valid justification for fiduciary law\u2019s prophylactic rule against conflicts of interest[131]<\/a> is, therefore, inaccurate. The strength of his assertion that no justifiable reason exists for the strictness of the rule is disproportionate to his own analysis of what might justify the imposition of such a rule in the first place, and to the analysis here. He acknowledges that \u201csome landmark decisions referred to the importance of precluding a conflict between interest and duty,\u201d[132]<\/a> but concludes that even that limited jurisprudential reference has been overshadowed by the desire to control the tendency of human nature to favour self-interest over selflessness.[133]<\/a> Curiously, his analysis does not inquire into why the prophylactic rule was established in the first place. That information is not necessarily forthcoming directly from the jurisprudence, but requires an extrapolation from the rationalization behind the creation of the fiduciary concept, the function of equity, and the existence of the fiduciary concept as an expression of equitable principles.<\/p>\n Valsan\u2019s emphasis on conflicts of interest and distinguishing traditional formulations or understandings of such conflicts within the confines of fiduciary interactions provides an important point of emphasis that is worthy of further consideration for its potential to enhance the understanding of conflicts of interest within fiduciary relationships. The risk of flawed or faulty judgment because of fiduciaries\u2019 introduction of extraneous interests or considerations into their duty to exercise judgment in their beneficiaries\u2019 interests is a serious concern. As Valsan suggests, it \u201ccould undermine the decision-making process by reducing the reliability of the decision maker\u2019s judgment, without rendering it incompetent.\u201d[134]<\/a> This threat exists because of the revelation from the interdisciplinary view that personal interests cloud individuals\u2019 judgment in ways they may not be conscious of. This inhibiting of judgment detrimentally affects those who rely upon that exercise of judgment or discretion, as in the case of beneficiaries who rely upon their fiduciaries to make decisions and exercise discretion over the former\u2019s interests.<\/p>\n Without the ability to manage these corrupting influences on fiduciaries\u2019 exercise of discretion, the conflict of interest control mechanism that ensures that fiduciaries act solely in their beneficiaries\u2019 interests cannot function effectively. Valsan illustrates how the interdisciplinary view addresses such occurrences:<\/p>\n The interdisciplinary view overcomes this flaw by recognizing that a person is in a conflict of interest on the basis of being in a conflicted situation, irrespective of the person\u2019s belief that she is capable of resisting the temptation or corrupting influence of the interest that could interfere with her judgment.[135]<\/a><\/p>\n As Valsan acknowledges, traditional formulations of conflict of interest within the context of fiduciary law have focused on the conflict between fiduciaries\u2019 self-interest and their duties to their beneficiaries (conflict of interest and duty). As discussed above, Valsan has suggested that fiduciary law ought to consider the core obligations arising under the conflicts issue as ensuring fiduciaries\u2019 \u201cduty to exercise judgment based on relevant considerations.\u201d He maintains that the latter is the core fiduciary duty that requires the special protection of the prophylactic no-conflict and no-profit rules. However, his argument is not convincing and appears rather circular.<\/p>\n Valsan correctly asserts that fiduciaries\u2019 discretion cannot be left unchecked in the face of a conflict of interest. That fact is fundamental to the existence of the prophylactic rule against conflicts. The interdisciplinary view of conflicts Valsan references indicates that fiduciaries are incapable of recognizing their own bias or impaired judgment when confronted with a conflict of interest. For this reason, he contends that their discretion must be controlled to ensure that fiduciaries comply with their duty.[136]<\/a><\/p>\n There are a few questions raised, however, by Valsan\u2019s analysis. The initial question is how fiduciaries\u2019 discretion is to be controlled. Recognizing the need to control fiduciaries\u2019 discretion is important, yet, Valsan does not offer suggestions or answers to control fiduciaries\u2019 discretion, or limit the problems created from the lack of control over that discretion. What is lacking from his article, and what fiduciary law desperately is crying out for, are solutions. It is one thing to recognize the need to control discretion, but quite another to demonstrate how to address or, better yet, solve that problem. On this score, Valsan\u2019s article falls short.<\/p>\n In the particular example of Valsan\u2019s article, the duty to exercise judgment based on relevant considerations sticks out as a primary example of this shortcoming. Valsan\u2019s article asserts the need to comply with this core duty, which he argues is absolutely necessary to eliminate fiduciaries\u2019 conflicts of interests. Nowhere does it indicate precisely, however, how this will be done or even provide a roadmap that establishes some possibilities of how this may be accomplished. If, indeed, the theory behind the core duty is correct, should the discussion of it not also encompass how it ought to be implemented? This shortcoming is common to many fiduciary law commentaries: it is more common to find fiduciary commentaries that make suggestions of how to improve the understanding or application of fiduciary principles, yet fail to provide a practical application of the proposition raised, than those that provide equal attention to both parts of the process. This deficiency reduces the usefulness of any suggestions that are made precisely because the authors do not attend to the all-important practical application of the theories they have espoused.<\/p>\n If fiduciaries are incapable of complying with the core fiduciary duty themselves, as the interdisciplinary theory indicates,[137]<\/a> they will, subsequently, require active assistance to make decisions when faced with conflicts of interest. Where will this assistance come from? Indeed, who will become responsible for flagging when fiduciaries need to obtain assistance? It cannot be the fiduciaries themselves, as their judgment has already been impaired as a result of the conflict. Indeed, they may well be tempted not to report the existence of the conflict based on the same considerations that the interdisciplinary theory put forward to support the idea of when fiduciaries\u2019 judgment is impaired.<\/p>\n Beneficiaries cannot be the ones who identify this conflict either, since in most situations of breach of fiduciary duty, beneficiaries are not in a position to assess the exercise of fiduciaries\u2019 discretion. Moreover, one of the primary reasons why fiduciary responsibility exists is precisely to obviate beneficiaries\u2019 need to monitor their fiduciaries\u2019 activities. If beneficiaries suddenly need to actively monitor their fiduciaries\u2019 activities, they may as well do the work themselves; conversely, if they handed over responsibility to their fiduciaries because they did not possess adequate knowledge or skill to discharge the functions in question, it would appear axiomatic that they would not possess the ability to properly monitor the fiduciaries\u2019 exercise of the powers transferred. Thus, it cannot be the beneficiaries who monitor fiduciaries\u2019 activities either.<\/p>\n The judiciary also cannot serve in this role of monitoring fiduciaries\u2019 exercise of discretion, since it is unreasonable to have judges monitor fiduciaries\u2019 actions during the active phase of fiduciary relationships and before any problematic behaviour arises. Where would their jurisdiction to monitor fiduciaries\u2019 discretion come from? Equally, what would provide the basis for beneficiaries to make an application to court to have it monitor fiduciaries\u2019 actions?<\/p>\n As in all situations involving private law relief, judges assess fiduciaries\u2019 actions after the fact, not beforehand. Indeed, the law does not allow for pre-emptive findings of fiduciary breaches, or breach of relationship fiduciarity by anticipation, but instead requires some wrongdoing to have occurred before making a finding of a breach of fiduciary duty.[138]<\/a> If judges can only make their assessments after the fact, their assessment of the appropriateness of fiduciaries\u2019 decisions whether to seek assistance or not when faced with a conflict of interest scenario cannot prevent the exercise of poor discretion or the failure to comply with the duty to exercise judgment based on relevant considerations should the fiduciaries exercise judgment rather than seek what effectively amounts to a judicial reference to determine whether they may act before acting. All that judges could do, then, is provide relief for the failure to comply with the core fiduciary duty, which is providing a remedy after the fact, not preventing the exercise of discretion for improper purposes. That is no different than what judges currently do and what the law allows them to do.<\/p>\n From the conclusions above, if neither fiduciaries, beneficiaries, nor the judiciary are adequate or competent to serve in a monitoring role to ensure fiduciaries do not attempt to exercise discretion while their judgment is impaired from a conflict of interest, who, then, is available and appropriate to assume this role? Would it become necessary to appoint some kind of fiduciary ombudsman to assume this role? Certainly, overseeing fiduciaries to ensure that they do not exercise discretion for improper purposes would be a massive undertaking, given the number of existing fiduciaries that possess discretionary power over their beneficiaries\u2019 interests. Presumably, those fiduciaries would also have to register with the fiduciary ombudsman so that their actions can be monitored. A legislative scheme would need to be crafted to create the office of fiduciary ombudsman and provide the office with enforcement powers. This would need to be done in each province and federally as well. This would be quite the undertaking. Valsan does not provide any suggestions, however, as to how the core fiduciary duty would be monitored to avoid fiduciaries\u2019 conflicts of interest.<\/p>\n An alternative option would be to relax the stringency of the duties against conflicts of interest. Valsan rejects arguments that favour this option, specifically those proposed by J.C.\u00a0Shepherd,[139]<\/a> John Langbein,[140]<\/a> Charles Mitchell,[141]<\/a> and in the case of Murad v. Al-Saraj<\/em>.[142]<\/a> He reasons that, as the interdisciplinary view of conflicts of interest profoundly demonstrates, the proscription against conflicts of interest cannot be diminished because even potential conflicts affect how fiduciaries exercise judgment over their beneficiaries\u2019 interests.[143]<\/a> In his view, arguments in favour of relaxing the strictness of the duty \u201care premised on a superficial understanding of the notion of conflict of interest and of the main role that the proscriptive duties serve.\u201d[144]<\/a><\/p>\nI.\u00a0 The Problem of Definition<\/h1>\n
A.\u00a0 The Uncertainty of the Fiduciary Concept<\/h2>\n
B.\u00a0 The Function and Purpose of the Fiduciary Concept<\/h2>\n
II. The Animating Forces of Fiduciary Duties<\/h1>\n
A.\u00a0 Essential Fiduciary Points of Emphasis<\/h2>\n
B.\u00a0 Valsan\u2019s Emphasis: A Primary Focus on Conflicts of Interest<\/h2>\n
1.\u00a0\u00a0\u00a0 Establishing the Parameters of Valsan\u2019s Thesis[56]<\/a><\/h3>\n
2.\u00a0\u00a0\u00a0 Conflicts of Interest<\/h3>\n
3.\u00a0\u00a0\u00a0 Reconciliation with Private Law<\/h3>\n
4.\u00a0\u00a0\u00a0 Linking Traditional Approaches to Conflict of Interest and the Fiduciary Concept\u2019s Raison d\u2019\u00catre<\/h3>\n
C.\u00a0 A Distinction Without a Difference?<\/h2>\n