Silence is golden: The Court of Appeal finds that fiduciaries have no positive duty to disclose wrongdoing

What are fiduciary duties?

Certain relationships give rise to fiduciary duties, such as those of a trustee, a company director or in certain cases LLP members to the LLP. Some senior employees may also owe fiduciary duties to their employer.

In Hopcraft v Close Brothers Ltd [2025] UKSC 33, the Supreme Court summarised the core obligation: “a fiduciary acts for and only for another. He owes a duty of single-minded loyalty to his principal, meaning that he cannot exercise any power in relation to matters covered by his fiduciary duty so as to benefit himself.” Two well-recognised rules flow from this duty of loyalty. Under the ‘no conflict’ rule, a fiduciary must not put themselves in a position where their interests and those of their principal might conflict. Under the ‘no profit’ rule, a fiduciary must not obtain a personal benefit from their position. In both cases, the principal’s informed consent provides a defence.

Must a fiduciary disclose their own wrongdoing?

Employers often argue that a senior employee who owes fiduciary duties must report their own wrongdoing or that of colleagues. A typical example is a team move scenario, where a senior manager takes preparatory steps to take their team to a competitor.

In G.I. Globinvestment Ltd v XY ERS UK Ltd [2026] EWCA Civ 1248, the Court of Appeal confirmed that fiduciaries do not owe a separate, free-standing duty to disclose all relevant information to their principals. A failure to disclose cannot, on its own, found a claim for breach of fiduciary duty. However, the ‘no conflict’ and ‘no profit’ rules still apply. Where a fiduciary relies on informed consent, the principal’s knowledge and sophistication will be important in deciding whether enough information was disclosed.

What should employers do next?

Employers can no longer assume that the law will require senior staff to speak up about wrongdoing. Any duty to disclose will need to be built in expressly.

1. Review senior contracts

The court confirmed that a contract can shape the scope of fiduciary duties. Senior employment contracts should include clear, express duties to report promptly the employee’s own misconduct, misconduct by colleagues and threats to the business, such as an approach from a competitor.

2. Be alert to team moves

A senior employee who knows of a planned team departure but has not taken part in any wrongdoing (such as soliciting colleagues or misusing confidential information) may now argue that they had no obligation to tell their employer. If silence is not a breach, it may be harder to obtain springboard injunctions or to recover profits made by departing employees. An express reporting obligation closes that gap.

3. Watch this space!

The Court of Appeal left open the wider question of whether fiduciary duties can ever require positive action. The issue may well reach the Supreme Court.