"While fiduciary duties are both necessary and fair, the judiciary have too much discretion in determining who falls within the category of fiduciary. It would be better for all concerns to lay down fixed rules. Discuss".
In this essay, a search for fiduciary relationships criteria is to be conducted. Thus, it is firstly essential to analyse the relevant terms used. .
Definitions/ the Law.
There have been many attempts to specifically define fiduciary relationships, but none has yet been adopted by the courts. Thus, many categories and sub-categories describing fiduciary relationships exist. A general definition has nonetheless happily been given by the law commission. A fiduciary relationship is " one in which a person undertakes to act on behalf of or for the benefit of another, often as an intermediary with a discretion or power which affects the interests of the other who depends on the fiduciary for information and advice" . More simply, fiduciary obligation exists where "the relationship between the parties is one which gives the fiduciary a special opportunity to exercise the power or discretion to the detriment of that other person who is accordingly vulnerable to abuse by the fiduciary of his position" .
Robert Flannigan recognises four types of fiduciary relationships. The two first are the "status-based", mentioned below, vigilant and deferential trusts, the third exists where one has been given access to assets, and the fourth is the "fact-based" trust involving influence from one party to another.
Before specifically analysing each of the four kinds mentioned above, it is wise to first explain what the "fact-based" and the "status-based" trusts are. The "status-based" fiduciary relationship exists where a bystander can easily see both a trust, in the legal sense, and a trusting relationship being in existence. The "fact-based" is the situation where a close examination of the facts is needed, to determine if a trust exists or not.
