3.

Fiduciary
duty
Fiduciary duty
 fiduciary - derived from the latin term “fiducia”,
meaning trust
 an individual in whom another has placed the utmost
trust and confidence to manage and protect property
or money
 A fiduciary relationship exists when one party,
because of superior knowledge, skill, and authority,
assumes responsibility for the welfare of another
party who is in a position of reliance
 fiduciary duty refers to the legal obligation of one
party to act solely in the best interest of another
party or principal , rather than serving their own
interests
 In this trust-based relationship, fiduciaries have 2
 Fiduciary duty …
 the care professional placed the best interest of the
patient first and was, in fact, the patient’s advocate
 A fiduciary obligation exists whenever
 one person, the client, places special trust and
confidence in another person and relies upon that
person, the fiduciary, to exercise his discretion or
expertise in acting for the client; and
 the fiduciary knowingly accepts that trust and
confidence and thereafter undertakes to act in
behalf of the client by exercising his, the
fiduciary's, own discretion and expertise

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 Fiduciary duty …
 There are three different kinds of models of doctor-
patient relationship:

1. Paternalistic model: the doctor is the

professional; he or she gives the order, the
patient obeys

2. Contractual model: the doctor and patient

"contract" for each other's mutual benefit; the
patient determines or agrees to the doctor’s
decisions

3. Fiduciary model: the patient confidently

entrusts his or her health care to the doctor, who
takes on the obligation of working for the benefit
of the patient 4
Fiduciary duty …
 the doctor-patient relationship has been defined,
through rules of ethics and rules of law, as a
fiduciary one, as a relationship founded in trust
 the patient agrees to take the physician into her
confidence, to reveal to him even the most secret
and intimate information related to her health
 the physician, in turn, agrees to honor that trust,
and to become the patient’s advocate in all matters
related to her health, placing her interests above all
others - including his own personal or financial
concerns
 the loss of this doctor-patient relationship has
obvious consequences for patients
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 Fiduciary duty …
 Fiduciary duties fall into two broad categories:
1. The duty of loyalty: fiduciaries should
 act in good faith in the interests of their
beneficiaries,
 should not engage in transactions that involve a
conflict of interest called "self-dealing"
transactions
 not act for the benefit of themselves or a third
party
2. The duty of prudence (duty of care):
 fiduciaries should act with due care, skill and
diligence, investing as an ‘ordinary prudent man’
would do 6
Fiduciary duty …
 A conflict of interest is a potential conflict exists
whenever
 an employee or an employee’s close friend(s),
relative(s), or associate(s) has a strong personal
life interest,
 the employee is involved in decision making on
behalf of the organization and
 the employee’s interest may cause (or may be
perceived as causing) the employee to exercise
his or her organizational decision-making power to
further personal interest rather than the
organization’s mission,
 to the detriment of the organization 7
 Conflicts of interest…
 physicians should not allow a conflict of interest to
influence medical judgment
 In some cases, conflicts are hard to avoid, and
doctors have a responsibility to avoid entering such
situations
 Research has shown that conflicts of interests are
very common among both academic physicians
and physicians in practice
 Health service providers can be affected by conflict
of interest by the following situations among others

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 Conflicts of interest…
 Referral
 For example, doctors who receive income from
referring patients for medical tests have been
shown to refer more patients for medical test
 Fee splitting and the payments of commissions to
attract referrals of patients is considered unethical
and unacceptable in most parts of the world
 Treatment of family members
 Many doctors treat their family members
 Doctors who do so must be vigilant not to create
conflicts of interest or treat inappropriately

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 Conflicts of interest…
 Vendor relationships
 Studies show that doctors can be influenced by drug
company inducements, including gifts and food
 Many patients surveyed in one study agreed that
physician gifts from drug companies influence
prescribing practices
 Many academic institutions banned pharmaceutical
industry-sponsored gifts and food to diminish the
influence of pharmaceutical industry on prescribing
practices of physicians
 Sexual relationships
 Sexual relationships between doctors and patients can
create ethical conflicts, since sexual consent may
conflict with the fiduciary responsibility of the physician
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