All healthy relationships require a basic foundation of trust: Professional relationships are no different. Oftentimes, business owners, contractors and other individuals put their finances in the hands of an investor or advisor. You enter a state of vulnerability when you rest your confidence in another's ability. Breach of fiduciary duty happens when that person breaks your trust.
Defining the role of a fiduciary
Professionals in various industries take on the role of a fiduciary. For example, an attorney owes you the fiduciary duty of confidentially. They can break that duty if they expose information about your case. In addition, stockbrokers and financial advisors have the fiduciary duty to use your finances and assets in your best interests. They cross a line if they use your assets or pressure you to invest in business ventures that benefit them, but harm you.
In summary, a fiduciary must act in your best interests. Working to benefit you should be their top priority. The law requires them to behave loyally and with extreme care. However, fiduciaries can run into trouble when they put their own interests first, such as:
- Retaining bribes
- Making a personal profit from a client's loss
- Withholding important information from a client
- Making a side profit without the client's permission
Overall, law requires a fiduciary to act in good faith, participate in fair dealing, stay loyal to client and fully disclose information that affects their client. A breach happens when these responsibilities are neglected.
Remedies for a breach of fiduciary duty case
There's three elements you need to prove for a breach of fiduciary duty claim: Duty, breach and damages. Once those are proved, you will have the opportunity to recover actual damages and possibly punitive damages.
If you feel as though a fiduciary has broken your trust, it's important to meet with an experienced lawyer and explore your legal options. Acting quickly could help you recover from financial loss.