Fiduciaries, bribes and constructive trusts—a policy-based justification

Abstract The Supreme Court in FHR European Ventures LLP v Cedar Capital Partners LLC [2015] AC 250 made clear that a fiduciary who breaches his fiduciary duties by receiving a bribe will hold that bribe on constructive trust for his principal. This article suggests that the law’s response to a breach of fiduciary duty is focused on the wrong of breach, rather than on enforcing the fiduciary’s primary duties. Viewed through this prism, a more thorough justification than that identified by the Supreme Court is necessary for imposing a constructive trust over a bribe. This article suggests that there is no principled reason for imposing a constructive trust, but that the justification is rooted in the policies underlying the entirety of the law of fiduciary duties—deterrence and prophylaxis.