Breach of Fiduciary Duty
A fiduciary duty is a legal obligation to act in another party’s best interest, such as the relationship between a corporation’s board members and that corporation’s shareholders. When this fiduciary duty is believed to have been breached, legal charges can result.
A business relationship in itself does not establish a fiduciary relationship. The principal must place a special trust and confidence in the fiduciary, and the fiduciary must knowingly accept that principal's reliance.
A person thought to have breached his or her fiduciary duty is liable for harm caused directly by the alleged breach. Under International Bankers Life Insurance Co. v. Holloway, a fiduciary said to have breached his or her duty forfeits all right to compensation, even when he or she did not profit from the alleged breach. However, "to require an agent to forfeit all compensation for every breach of fiduciary duty, or even every serious breach, would deprive the remedy of its equitable nature and would disserve its purpose of protecting relationships of trust."
Conduct by a fiduciary can lead to constructive fraud allegations involving acts, concealments, or omissions considered fraudulent and giving the fiduciary an advantage, even when this conduct is not actually deceitful, dishonest, or fraudulent.
Ramifications of Fiduciary Duty Breach
Moreover, even without the ultimate finding of any liability, breach of fiduciary charges can have a ruinous impact on a business' reputation unless combated immediately and aggressively.
Even when the lawsuit is between a husband and wife, damages can run well into six figures. This is why it is so important to be able to rely on a legal team experienced in fighting frivolous breach of fiduciary charges. The Blanch Law Firm has both the experience and the resources to face down your accusers, whether in court, by way of negotiation, or through nuanced procedural moves.
Attorneys also have a fiduciary duty to their clients. You acted in good faith and with due diligence; you can expect the same from us.
Contact one of The Blanch Law Firm's breach of fiduciary duty attorneys by calling 212-736-3900. Your initial consultation is free and confidential.