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Fiduciary duty and members of parliament

Canadian Parliamentary Review, 2008-06, Vol.31 (2), p.31

COPYRIGHT 2008 Canadian Parliamentary Association ;Copyright Commonwealth Parliamentary Association Summer 2008 ;ISSN: 0229-2548

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  • Title:
    Fiduciary duty and members of parliament
  • Author: Aagaard, Lindsay
  • Subjects: Analysis ; Fiduciaries ; Fiduciary duties ; Fiduciary responsibility ; Legislators ; Parliaments ; Power (Social sciences) ; Powers and duties
  • Is Part Of: Canadian Parliamentary Review, 2008-06, Vol.31 (2), p.31
  • Description: In its origins, the word "fiduciary" means "trust-like." "Fiduciary duty" is the duty of loyalty that is owed by the powerful party to the vulnerable party when the two are in a fiduciary relationship. The fiduciary relationship can also be characterized as a vehicle used to impose duties on individuals who hold power over the interests of others. As [Leonard Ian Rotman] writes, "beneficiaries are vulnerable to the misuse or non use of power, and fiduciaries [ought to] act with honesty, selflessness, integrity, fidelity and in the utmost good faith (uberrima fides) in the interest of the beneficiary"2 Fiduciary obligation has been described as a "blunt tool for the control" of discretion and is viewed by many scholars as the way in which social norms or mores are captured within the law, and the way by which "law transmits its ethical resolve to the spectrum of human interaction."3 The result of fiduciary law is that obligations, in the form of a standard of conduct, are imposed to regulate the way in which the opportunities that often arise from being in a position of power can be utilized4. Though the concept of fiduciary duty, stemming from a fiduciary relationship, is one with which courts still struggle, and though it has been described as having an "innate resistance to definition" and an inherent malleability, a guide has been developed through jurisprudence to aid in the determination of at least the institutional category of fiduciary relationships.5 In Frame v. Smith Justice Wilson outlined a "rough and ready" test which captures basic characteristics of the fiduciary relationship. First, the fiduciary must have "scope for the exercise of discretion or power". second, the fiduciary must be able to unilaterally exercise "that power or discretion so as to affect the beneficiary's legal or practical interests". Third and finally, the beneficiary in a fiduciary relationship must be "peculiarly vulnerable or at the mercy of the fiduciary holding the discretion or power".6 Once a fiduciary relationship has been found, "equity will then supervise the relationship by holding [the fiduciary] to the fiduciary's strict standard of conduct."8 This standard of conduct gives substance to the "conceptualization of loyalty" found in the fiduciary doctrine, and demands at least that the fiduciary not act where there is a conflict between the duty to the beneficiary and the interest of the fiduciary, and prohibits the fiduciary from making a profit as a result of being in a fiduciary position. A breach of fiduciary duty is found where there has been "unauthorized conflict or benefit," where fiduciaries privilege their own interests over those of the people they are obligated to serve.9
  • Publisher: Ottawa: Canadian Parliamentary Association
  • Language: English
  • Identifier: ISSN: 0229-2548
  • Source: Free E Journals
    ProQuest Central
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