A fiduciary (F) profits from rights, information or opportunities acquired through a fiduciary relationship with a principal (P). The “profit rule” requires F to account to P for all such profits, unless P has given informed consent to F keeping them.1 It is no defence for F to plead that the profits would have been made anyway absent a breach of fiduciary duty.

The question for the Supreme Court in Rukhadze v Recovery Partners GP Ltd 2 was whether the law should be changed so that F could retain profits that would, counterfactually, have been made regardless of breach. Simplified, P (a British Virgin Islands company) was engaged by the family of a deceased Georgian billionaire to provide asset recovery services.3 F was a director at P. By virtue of that position, F owed fiduciary duties to P “based on … common law rules and equitable principles”.4 In the course of F’s fiduciary relationship with P, F obtained the opportunity to provide further recovery services to the family. F resigned and deprived P of that opportunity, making net profits of $179 million.5 F contended that there was no obligation to account in full to P, as half of the profits would have been made without breach—either because, had F not