Abstract:
An account of profits operates to strip a fiduciary of unauthorised gains. While the authorities suggest that the duty to account follows almost inexorably from the breach, the precise nature of this obligation reflects the nuances of the particular relationship and the manner in which it was abused. This article explores the varied nature of fiduciary duty and the interplay between causation, remoteness and perceptions of the breach in defining the obligation to account. These elements are contrasted with the award of allowances to the defaulting fiduciary and the anomalous status of such awards in relation to the primary duty of fidelity. Attention is directed to developments in this area and their implications for establishing the amount that is ultimately disgorged as the net gain. It is argued that the process of accounting is dualistic. The first phase is concerned with quantifying gross profits that flow from the breach and the second is directed to the net gain that must be disgorged. The overall objective must be reconciled with the fact that the exercise is driven by different normative considerations.