A fiduciary is a person placed in a position of trust and invested with power to care for another person’s interests. Fiduciary duty litigation arises when that trust has been broken, and the fiduciary has failed to properly care for that other person’s rights or property. Common fiduciaries include lawyers, real estate agents, and corporate officers.
COMMON FIDUCIARY DUTY LITIGATION ISSUES
HANDLING FIDUCIARY DUTY LITIGATION ISSUES
Fiduciaries owe a duty of loyalty to another person. This duty requires the fiduciary to act in the other person’s best interests. Out of this duty of loyalty offshoot several other fiduciary duties including a duty of care, a duty to speak, and a duty to disclose.
Fiduciary duty litigation often involves allegations of conflicting loyalties or a failure to reasonably perform the tasks with which the fiduciary was entrusted. For example, a fiduciary may be accused of poaching a business opportunity for itself which belonged to the represented party, or the fiduciary may be accused of risking and wasting assets unreasonably.
Fiduciary duties are almost always creatures of contract, statute or administrative rules. The governing contract, statute, or rule should be reviewed to see what enforcement options are available.
The first step in handling fiduciary duty issues is to make sure that there are no continuing breaches. Usually, this involves removing the fiduciary from his position of power through the procedures set forth in the contract at issue. After the fiduciary is removed, the parties look next to ameliorating the damages caused by any fiduciary breaches.