Accessory Disloyalty: Comparative Perspectives on Substantial Assistance to Fiduciary Breach

Abstract

Culpable participation in a fiduciary's breach of duty is independently wrongful. Much about this contingent form of liability is open to dispute. In the United States, well-established general doctrine defines the elements requisite to establishing accessory liability, which is categorized as a tort and often referred to as aiding-and abetting liability. What's controversial is how the tort applies to particular categories of actors, most recently investment banks that advise boards of target companies in M&A transactions. In the United Kingdom, in contrast, accessory liability in connection with a breach of trust or fiduciary duty is controversial because the law is less clear, at least in part due to significant shifts in doctrine within a relatively short period of time. And equity houses the wrong, not tort (and the requisites for aiding-and-abetting liability in connection with a tort are significantly different). This essay, written as a contribution to a forthcoming book, uses contrasts between law in the US and the UK to deepen its examination of this distinctive form of wrongdoing. The essay's central claim is that how the law categorizes a wrong matters for the elements of accessory liability. That is, breaching a fiduciary duty and culpably assisting in the fiduciary's breach are both instances of wrongful conduct. Characterizing both as tortious, as does US law, has consequences for the elements of accessory liability. The comparative account also illustrates the independent character of accessory liability, underscored by outcomes in both jurisdictions in which the accessory's culpability differs from that of the fiduciary as primary wrongdoer.