ABSTRACT
Loyalty requires, paradigmatically, that the fiduciary act in what they perceive to be the best interests of the beneficiary. Yet what is the value of such loyalty? After all, a fiduciary may well perceive their beneficiary’s bests interests incorrectly. After demonstrating the weaknesses of existing arguments, this paper argues that such ‘best interests’ loyalty has the negative value of excluding the wrong of despotism in a fiduciary relationship. Despotism – a master-slave like relationship – is what would arise if a fiduciary were able to wield their power over the beneficiary with unregulated discretion in service of their own whims. The paper then argues that this negative value is what other varieties of loyalty, such as agency loyalty, have in common with the bests interests standard. Anti-despotism, therefore, is the unifying negative value that explains why, as a rule, fiduciary relationships require a duty of loyalty of some variety, even if different positive values offer the best general explanation for why courts might favor any particular variety of loyalty in any particular kind of relationship.
Nikolas Kirby, The Value of Fiduciary Loyalty, Legal Theory, volume 32, 2026. Published online by Cambridge University Press: 24 September 2026.
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