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The fiduciary duty
Essay question
In his book, Property and Justice (Clarendon Press, Oxford, 1996), Professor J. W. Harris observed that the strict rule that a fiduciary must account for unauthorised profit 'confers the windfall constituted by the fiduciary's profit, not on the community, but on his principal', with the result that the principal is entitled to claim it in preference to the fiduciary's creditors. Professor Harris asks: 'Why should the principal take a windfall in priority to those to whom the fiduciary owes purchased obligations?'
Outline the reasons why English law takes this approach, and state why, in your opinion, this is (or is not) the correct approach for the law to take.