Abstract

This article considers the recent Court of Appeal decision of Bank of Credit and Commerce International (Overseas) Ltd v Akindele. In this case, the Court of Appeal was required to consider a claim that the defendant should be held liable as a constructive trustee for dishonestly assisting in breaches of fiduciary duty, or knowingly receiving property traceable to a breach of fiduciary duty. The decision is important as the Court of Appeal proposed a new liability test for the claim of knowing receipt. It was held that the test should no longer be based on knowledge. Instead, the court should now determine the claim on the basis of whether the defendant received the property unconscientiously. This article reviews the law, and suggests that the test of unconscientious receipt is preferable to the test of knowledge, as it has a flexibility which was not available under the knowledge‐based test. But, the notion of unconscientiousness, or unconscionability, is too subjective and requires some structure. In the article, economic analysis is used to give the concept of unconscionability the necessary structure