Objective
Insurance intermediaries will recall from their studies of agency law that they, as agents, owe both a duty of care and skill and a duty of loyalty to their own principals. That said, it is unfortunate that the distinctions between these two types of duties are, more often than not, not understood even to the slightest extent. Unlike the duty of care and skill, which involves the notion of reasonableness, the law on the duty of loyalty is so strict that a breach of the duty will lead to astonishing remedies against the wrongful parties. For instance, a mere technical breach of the duty of loyalty will suffice to give rise to liability to the aggrieved principal, honesty, good faith or absence of negligence on the part of the wrongful agent or absence of loss to the principal being irrelevant. In the context of the duty of loyalty, an agent, a trustee, a company director, etc. are termed fiduciaries. In fact, the duty of loyalty is but an aspect of fiduciary duties.
Content
- Relationships classified as fiduciary
- Nature of liability of fiduciaries; distinction between proprietary claims and personal claims
- Distinction between fiduciary duty and duty of care and skill
- The 'no conflict' rule, 'no unauthorised profits' rule, 'self-dealing' rule, 'fair-dealing' rule and the like thatunderpin fiduciary obligations; circumstances of violations of such rules
- Applications of the above to agents, trustees and directors
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