Fiduciary duties relate to the professional responsibilities that an individual owes you while providing a service. For example, imagine a doctor is treating you for an illness. The doctor has a duty to provide treatments and medical services to you that are in alignment with your best interests and needs.
By virtue of your doctor's fiduciary obligation to you, he or she may not prescribe an unnecessary surgery in order to generate more income. This would be in violation of your best interests and a breach of the fiduciary duty owed to you by your doctor. The same concept of duty applies to individuals in other professions, like therapists, financial advisors and lawyers.
Defining the fiduciary relationship in more detail
A fiduciary relationship is not limited to people providing services to the public in a professional capacity. In fact, a fiduciary relationship exists whenever one party puts his or her trust and confidence in another individual with this individual's full awareness.
In a fiduciary relationship, the party being trusted cannot violate his or her duty to act in the other party's best interest. The legal nature of this relationship becomes especially important when the fiduciary could use his or her status as an "expert" or person of authority to take advantage of a client that has trusted him or her.
When a fiduciary breaches his or her duties
When courts review whether a fiduciary has breached his or her duties owed to a client or patient, the courts will consider the following questions:
- Did a fiduciary relationship in fact exist between the harmed person and the alleged fiduciary at the time the dispute arose?
- What specific duties did the fiduciary owe to the other party?
- What specific duties did the fiduciary breach?
Any action that contradicts the best interests of the client, actions that are performed only for the benefit of the fiduciary, and failures to disclose materially important information to the client could constitute breaches of duty in this context.
Did a trusted professional take advantage of you?
When a trusted professional takes advantage of his or her client for one's own profit and gain -- for example, in cases of legal malpractice -- there is a high probability that the professional breached the fiduciary duties owed to the client. When this occurs, the fiduciary could be financially liable to the client for resulting injuries and damages.