Remedies for breach of a Fiduciary Duty

Our previous articles looked at what Fiduciary duties are (cllick here) and Directors Fiduciary Duties (click here).  In this note we focus on the remedies for breach of fiduciary duty.

The remedies for breach of a fiduciary duty and the extent that they apply to a given situation vary in accordance with how severe the breach in question is. Remedies include:

Injunction this is a discretionary remedy awarded by the court and the test to obtain this is high. If anything has been taken away that is of commercial value then the court can also order the delivery up of the goods.

Damages if the fiduciary fails to carry out his duties and this results in a loss to the beneficiaries then he will be liable to the beneficiaries for the loss.

Setting aside of the transaction, restitution and account of profits a voidable transaction may be set aside by the beneficiary and giving restitution, an account of profits or restoration of, for example, any company property held by the director. A fine can also be imposed.

Disciplinary Proceedings a person that has breached his fiduciary duties can be disciplined, for example in the case of a director of a company.

Criminal Sanctions can be imposed for breach of fiduciary duties where there is criminal or fraudulent intent.

Izaz Ali ( Izaz is a commercial lawyer who specialises in information technology law and intellectual property law with an emphasis on IT, escrow, online and off-line contracts, and the buying and selling of online businesses.

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