Article: Degrees of Loyalty

Lionel Smith (Oxford University Faculty of Law) recently published, Degrees of Loyalty, 2025. Provided below is an Abstract:

The common law has traditionally taken an all-or-nothing approach to loyalty: parties can pursue their own interests atomistically, or they are required by fiduciary norms to subordinate their interests to those of another. The modern civilian tradition, by contrast, tends to recognize wide-ranging duties of good faith in contractual and other settings, and this approach has made inroads in the common law world. Although these duties are often characterized by civilians as duties of loyalty, they usually do not require the debtor of the duty to subordinate their own interests to those of the other; rather, they require the debtor to take account of the interests of the other. The wide application of this less demanding form of loyalty may have obscured the existence in the civilian tradition of the more intense form of loyalty that is well-known in the common law; but it too clearly exists in civil law.

This paper will argue that in both traditions, duties of loyalty can rightly be understood to exist along a spectrum of intensity. There is an articulable commonality between contractual duties of good faith and fully fiduciary duties of loyalty; but there are also clear and articulable differences. Indeed, careful analysis of the spectrum of loyalty may reveal multiple intermediate positions between the absence of any requirement of loyalty (as between strangers) and the most demanding requirements of loyalty that arise in relationships of administration of another’s interests. This paper will also address another difficult point: whether it is subjective motivation that distinguishes disloyalty from loyalty, in all its degrees.