Fiduciary duty not confined to directors

Samsung Semiconductor Europe Ltd v Docherty 2011 CSOH 32

Mr Docherty was ordered to account for profits derived from his interest in a company that had provided Samsung with quality control services. Unknown to Samsung, Mr Docherty had secretly held a 50% shareholding in the company. He had to repay ?340,808 which he had received from the company by way of salary, share of profit and payment of shares for several years.

Mr Docherty was not a director only a manager of Samsung but he held a key position with significant responsibility and he was in a position to influence Samsung's decision about not using the company's competitors. The effect of this was that Mr Docherty owed a fiduciary duty to Samsung. It did not matter that Samsung did not expressly inform Mr Docherty that he owed it a fiduciary duty or suffer a loss.

The case demonstrates that an employee does not have to be a director to owe a fiduciary duty. It did not matter that there was no detriment to Samsung in this case. The existence of a fiduciary duty and potential conflict was sufficient to establish a duty to account.

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