Breach of Fiduciary Duty

A fiduciary duty is a legal duty to act on another’s behalf and exclusively in furtherance of that party’s interest. An attorney has a fiduciary duty to act on behalf of his or her clients.

What this means is that the attorney must place the client’s interests before his own. He must act in good faith and with full disclosure at all times. For example, an attorney cannot take advantage of his position to gain a profit at the expense of his client. He cannot use information he obtains through representation to help himself financially if it will in any way weaken the client’s position. He cannot ignore his client’s interests in favor of another party’s interests.

An attorney must always be very clear about who he represents, and to whom his fiduciary duties are owed. For example, an attorney may represent a business or a corporation and be required to provide advice or take action that is contrary to the interests of the individual officers or directors who hired him or originally retained him. In such a scenario, the attorney’s fiduciary duty compels him to exercise the utmost good faith for the benefit of the company, even if it is against the interests of a single person or persons with whom he may have had a personal relationship.

Fiduciary duties will also arise when attorneys serve as trustees of estates or court-appointed guardians of minor or disabled persons. In such cases, the attorney’s fiduciary duties must be clearly defined. If an attorney serves as a trustee of a Trust, then he, in addition to his role as an attorney, he owes a fiduciary duty to make decisions that are in the best interest of the beneficiaries of the Trust. If the attorney is appointed to serve as guardian of a minor child or other dependent person, he must ensure that the child has appropriate care, including medical care and other necessities – and this means his loyalties are to the child and nobody else.

When an attorney breaches his fiduciary duty to a client, he has essentially broken the loyalty and fidelity that formed the attorney-client bond. He may liable for damages for legal malpractice, and he may also be guilty of committing ethical violations that violate the Rules of Professional Conduct.

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