Moral Imperatives vs. Efficiency Primacy: A Comparative Study of Fiduciary Duty Rules in Anglo-American Trust Law

Luyao Huang

GBP Proceedings Series, 2025, vol. 13, 133-138

Abstract: This comparative legal study explores the institutional divergences and underlying jurisprudential rationales shaping fiduciary duty regulations within Anglo-American trust law. The analysis reveals that U.S. trust law, through adaptive mechanisms such as "safe harbor provisions" and the "procedural-substantive dual-review framework," reconceptualizes fiduciary obligations in commercial contexts as instruments that enhance economic efficiency rather than as restrictive constraints, reflecting a distinctly functionalist orientation. By contrast, English law adheres to an uncompromising equitable doctrine of "strict conflict prohibition," emphasizing ethical rigor and moral rectitude in fiduciary relationships, often at the expense of commercial flexibility. Through systematic empirical case analysis, this study demonstrates how American jurisprudence achieves a pragmatic equilibrium between commercial utility and fiduciary accountability via mechanisms such as "stratified remedies" and "substantive fairness exceptions," while simultaneously highlighting the adaptive challenges that the rigid English framework faces in contemporary trust arrangements. Further, by examining recent developments under the Uniform Trust Code (UTC) in the United States and the proposals advanced by the English Law Commission, this study elucidates the theoretical fault lines between property rights theory and relational contract theory as the foundational drivers of these institutional divergences. The analysis underscores the broader normative and regulatory implications, arguing that contemporary trust law must strike an optimal balance between ethical safeguards and technical governance mechanisms. Such a recalibration is essential not only for domestic legal coherence but also for informing the convergence of fiduciary standards in global asset management and cross-border trust regulation.

Keywords: fiduciary duty; comparative law; conflict of interest; commercial trusts; equity; global asset management (search for similar items in EconPapers)
Date: 2025
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