Fiduciary duties

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When advising on matters relating to directors we always keep in our mind the fiduciary duties owed by such individuals.  However, the case of Customer Systems plc v Ranson and others (2011) has provided a useful reminder by stressing it is not just directors who may owe fiduciary duties.  In identifying whether a fiduciary relationship has been established between an employer and employee “… it is necessary to identify with care the particular duties undertaken by the employee, and to ask whether in all the circumstances he has placed himself in a position where he must act solely in the interest of his employer.  It is only once those duties have been identified that it is possible to determine whether any fiduciary duty has been breached.”

In this particular case the High Court found that Mr Ranson (a senior sales manager) owed fiduciary duties as a senior employee which he acted in breach of by setting up a competing consultancy business during his employment with Customer Systems.  It was found, for example, that Mr Ranson owed fiduciary duties such that he should have reported to Customer Systems his approaches to its clients to compete and his use of its confidential information such as business contact details.