This chapter considers the psychology of fiduciary law, with particular emphasis on how the principal-agent dynamic affects judgment and decision-making. From a decision-making perspective, a characteristic of fiduciary behavior is that fiduciaries choose for others. Behavioral decision research has focused on the ways that actors decide differently when they are acting for others rather than acting for themselves. To introduce readers to the psychology of self-other decision-making, this chapter reviews the theoretical framework within which these questions have been situated, along with some of the most relevant and intriguing experimental research. Three principal areas of research are discussed: the effect of social distance on the mental operations utilized in judgment under uncertainty; the moral psychology phenomena around navigating conflicts of interest; and the specific social dynamics of deciding in the context of a relationship, whether one-shot or ongoing. The chapter examines the concept of “psychological distance” as an integral component of construal level theory, and the extent to which heuristics and biases are acute for agents and principals. Along the way, Prospect Theory and concepts such as loss aversion, risk perceptions, intertemporal discounting, self-serving biases, disclosure approaches to regulating conflicts of interest, impression management, accountability, and hindsight bias are explored.
Mark A. Hall
This chapter examines fiduciary principles in health care law. There is no unanimous agreement when it comes to the precise doctrinal consequences of labeling health care actors as fiduciaries in various contexts, such as personal injury, decisional authority, financial influence, and procedural rules. In the case of patients and physicians, certain attributes are said to constitute an archetypal fiduciary relationship, including agency, dependency, trust, and information asymmetry. Thus, many legal decisions and commentators argue that physicians have fiduciary responsibilities to patients. For courts, however, hospitals are not fiduciaries. They regard private hospitals as ordinary commercial enterprises. This chapter first provides an overview of arguments over whether physicians and non-physicians (for example, hospitals and health insurers) are “fiduciaries” before discussing health care fiduciaries’ duty of loyalty and duty of care, along with their other obligations such as duties of confidentiality and full disclosure. It also explores the ability of health care fiduciaries and patients to waive fiduciary duties, as well as how courts have addressed distinct causes of action for physicians’ breach of fiduciary duty. It shows that courts often invoke fiduciary concepts and terminology in discussing physicians’ obligations to patients, and that physician-patient (and other medical treatment) relationships have classic attributes of fiduciary status.
Nina A. Kohn
This chapter examines the fiduciary principles governing surrogate decision-making. Surrogate decision-making relationships arise when one person is appointed to make decisions for another, and are often used to make decisions for individuals with acute medical conditions or cognitive disabilities that make it difficult or impossible for the individuals to make decisions for themselves. A surrogate decision maker may be authorized by the individual for whom decisions are to be made or by a third party, including a court or a federal agency providing benefits to the individual. This chapter first considers how fiduciary duties are triggered in surrogate decision-making relationships and describes the requirements for appointment and acceptance by type of surrogate: guardians and conservators, agents acting under a power of attorney for finances or health care, and representative payees and other government fiduciaries. The discussion then turns to the surrogate decision maker’s duty of loyalty and duty of care, along with other fiduciary obligations. The chapter concludes with an overview of remedies available for a breach of fiduciary duty by a surrogate.