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Director & Officer Liability

When is a breach of fiduciary duty actionable, and what can you do?

A fiduciary must act in the beneficiary's interest, avoid conflicts, and not profit from the position. Directors, officers, business partners, trustees, executors, lawyers and financial advisers can all owe fiduciary duties. The distinction that matters practically: a breach of fiduciary duty is stronger than an ordinary contract claim, because remedies can include disgorgement of profits regardless of whether you can prove a corresponding loss.

What to do next

  1. Establish that the relationship was fiduciary

    Some relationships are fiduciary by category - director to corporation, trustee to beneficiary, lawyer to client. Others depend on the facts: discretion held over your interests, your vulnerability, and reasonable reliance on them to act in your interest.

  2. Identify the specific breach

    An undisclosed conflict, a diverted opportunity, self-dealing, secret profit, or use of confidential information for personal gain. Precision matters, because the remedy follows the nature of the breach.

  3. Preserve the evidence before it disappears

    Corporate records, board minutes, email, bank and accounting records, and any competing entity's filings. Where corporate opportunity or diversion is alleged, act quickly - electronic records are the first thing to go.

  4. Consider urgent protective relief

    Where assets may be dissipated or confidential information is being used, injunctive and preservation orders exist but require prompt action and clean evidence. Delay undermines the application as much as it undermines the evidence.

  5. Understand what you can recover

    Beyond damages, disgorgement of profits and a constructive trust over property acquired through the breach may be available. That is what makes framing the claim correctly worth doing at the outset.

Frequently asked questions

How is this different from breach of contract?

A fiduciary claim can require the wrongdoer to give up profits made from the breach even where your own loss is hard to prove, and can attach a trust to specific property. Contract remedies are generally compensatory only.

Does a business partner owe me a fiduciary duty?

Partners generally owe fiduciary duties to one another. Whether a particular business relationship is fiduciary depends on discretion, vulnerability and reliance - it is a fact-specific question.

What if it is my lawyer or accountant?

Professionals owe fiduciary duties to clients. A regulator complaint addresses conduct; recovering loss requires a civil claim, and the two run on independent deadlines.

Which lawyer handles this?

A commercial litigation lawyer, or an estate litigator where a trustee or executor is involved. These claims are evidence-intensive and time-sensitive.

This is general information, not legal advice. Laws vary by location and every situation is different — speak with a qualified lawyer about your specific circumstances.

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Go deeper

Guides, Forums & Where This Is Decided

Background reading and the bodies that hear director & officer liability matters.

Related guides

  • Corporate Governance Issues

    Governance essentials: director and officer duties, conflicts, shareholder remedies including oppression, records rights, and duties near insolvency.

  • Shareholder Disputes and the Oppression Remedy

    How Canadian shareholder disputes are resolved: the oppression remedy, reasonable expectations, derivative actions, deadlock mechanisms, valuation and buyouts.

Where this is decided

All courts & tribunals