“Fiduciaries must account for unauthorized profits despite acting honestly”
Boardman, a solicitor to a trust, and Tom Phipps obtained confidential information about a company in which the trust held shares. Using this information, they purchased additional shares with their own money and made substantial profits after improving the company's performance.
Whether fiduciaries must account for profits made using confidential information obtained through their fiduciary position, even when acting honestly and benefiting the trust
By a majority of 3:2, the House of Lords held that Boardman and Tom Phipps were liable to account for their profits as they had used confidential information obtained in their fiduciary capacity
This case established the modern strict approach to fiduciary accountability in English law and remains the leading authority on the no-profit rule. It demonstrates that fiduciary duties are prophylactic rules designed to prevent conflicts rather than remedy actual harm.
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OSCOLA Citation
Boardman v Phipps [1967] 2 AC 46 (HL)
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