This article addresses the manner in which accounts of profits are quantified when they are ordered against fiduciaries. Unlike previous scholarship, which has often sought to explain recent case law by reference to preconceived conceptual models, the present article addresses the topic by drawing on the reasoning adopted in the cases over a longer period, with a view to helping with the practical resolution of future cases, while also offering arguments drawn from that analysis as to the correct approach to the conceptual questions that arise.

In Novoship (UK) Ltd. v Nikitin, a unanimous Court of Appeal held that an account of profits can be granted against a third party who dishonestly assists a breach of fiduciary duty. This raises fundamental questions as to the status of gain-based relief in relation to secondary wrongs. An account of profits reflects the imperatives of fiduciary duty and it is questionable whether the remedy should be extended to a stranger to that relationship. This article will analyse the spectrum of secondary liability and suggest an appropriate demarcation of compensation and disgorgement.

Where a fiduciary receives a bribe or a secret commission in breach of fiduciary duty it remains controversial whether the bribe or secret commission will be held on constructive trust for the principal. The Court of Appeal has held that in most cases there will only be a personal liability to account. That is incorrect. The duty of the fiduciary is to serve the interest of the principal to the exclusion of his own interest. A fiduciary who keeps a profit for himself abuses the trust and confidence placed in him by the principal. He is bound to hand it over to his principal the moment he receives it. Equity's response to a breach of this duty is to enforce the duty by means of the constructive trust.