Parenthood as a Fiduciary Relationship

Forthcoming in the University of Toronto Law Journal is my paper, “Parenthood is a Fiduciary Relationship”, which I presented in Oxford at the Property Law Discussion Group on 6 March 2020. For many, fiduciary relationships are relationships of property management, which makes it hard to understand how parenthood can fit into this category.

In the cases and in the scholarship, however, there are many explicit and implicit understandings of what fiduciary relationships are, and what the law is aiming to accomplish when it attaches fiduciary duties to such relationships. If you think, as some people do, that this whole area of the law exists in order to provide remedies when people are taking what does not belong to them, or when people don’t keep their promises, then the relevance to parenthood is minimal.

But, as noted in section IIIC of my paper, there is a rising tide of scholarship and court decisions that understands fiduciary relationships as relationships in which one person has been empowered to attend to the interests of another person (or, indeed, of some impersonal purpose, as in a charitable trust). In this understanding, what brings them together is that they are situations in which one person acts for and on behalf of another, usually using legal powers that have been bestowed in order to allow them to fulfil that mission or function.

This ‘relational’ approach, unlike some others, puts the control of fiduciary powers at the centre of fiduciary law, rather than focusing on the rules against unauthorized profits, or the rule against acting while in a conflict of self-interest and fiduciary duty. But this is what the courts themselves do: the exercise by fiduciaries of their fiduciary powers is reviewable when those powers are used improperly, even in the absence of any conflict or unauthorized profit. The relational approach also of course incorporates those characteristic fiduciary duties. The exercise of fiduciary powers while in a conflict of self-interest and fiduciary duties is necessary because these are situations in which the powers may be improperly exercised, even by a fiduciary in good faith. In re Lamb

As well as judges, psychologists too have observed that people tend to favour their own interests, often unconsciously. And on the relational approach, the rule against unauthorized profits is not a sanction for having breached a duty; it is simply the allocation of benefits to the proper sphere. If I am acting for myself, I can keep the profits that I earn; if I extract profits when I am acting for and on behalf of you, those profits go to you. This is just the mirror image of the principle that when a fiduciary is acting properly, they are allowed to recover the expenses they incur, as discussed in section VI.F of another recent paper.

The main argument of the paper is to say that on this relational view, parenthood is a fiduciary relationship. Parents are given various powers over their minor children by the law: powers to restrain their liberty, such as in deciding where the family should live or what religion the children shall be brought up in; powers to make them work, within limits; and powers to discipline them, again within lawful limits. But the law does not give parents these powers for the benefit of the parents; it gives them these powers for the benefit of the children. The way they are properly used is for and on behalf of the children. This constitutes a fiduciary relationship.

One line of resistance to this argument is to observe that parents, in the exercise of their parental authority or powers, can often take account of their own interests. This, it might be said, is inconsistent with parenthood as a fiduciary relationship, since fiduciaries cannot consult their own interests in exercising their fiduciary powers. The method of the paper is to show how the features of the parent-child relationship, that are said by some to prove the relationship is not fiduciary, are in fact found in many relationships that are uncontroversially fiduciary. More generally, the paper aims to show that many characteristics that are said to inhere in fiduciary relationships may be typical of these relationships, but are not diagnostic of them. Fiduciary relationships—including the most uncontroversial ones—exist in many contexts, and there are several situations in which fiduciaries are allowed, in the exercise of their fiduciary powers, to consult their own interests.

The acceptance by some courts (such as the Supreme Court of Canada) that parenthood is a fiduciary relationship can also therefore be seen as the acceptance of a relational understanding of fiduciary relationships. It will be interesting to see what other apex appellate courts will do with this issue in the future.

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How to cite this blog post (Harvard style) 

Smith, L. (2020). Parenthood as a Fiduciary Relationship. Available at: https://www.law.ox.ac.uk/research-and-subject-groups/property-law/blog/2020/04/parenthood-fiduciary-relationship (Accessed [date]).