A fiduciary relationship could be created under the law, such as a contractual relationship between a principal and an agent, or an administrator and an heir. It could also be created by the relationship of the parties and the transaction that has occurred for example, a business partnership.
When trust is broken in these relationships, it can be devastating both emotionally and financially. The duties of a fiduciary include loyalty. The law and individuals both assume the fiduciary will act with integrity toward the interests of the other party in the transaction.
A breach of fiduciary duty occurs when the fiduciary exploits the relationship, typically for monetary gain. This might be an act of fraud, a breach of reasonable care or negligent misrepresentation. In any case, the fiduciary failed to meet expectations of trust.
You can take legal action against fiduciaries who have failed in their duties. However, you will need to establish three elements to recover damages, answering these questions before bringing a lawsuit:
- Was there a fiduciary relationship and fiduciary duty?
- Was the duty breached?
- What damages resulted from the breach?
If you lost profits because of the breach, it might be possible to recover these in a lawsuit. You may also recover the fees you paid to the fiduciary for services and any profits the fiduciary received. In certain cases, plaintiffs have received punitive damages for an especially egregious breach of fiduciary duty.
If you believe you have been harmed in your business dealings, there could be a remedy. Before proceeding with a lawsuit, you may want to speak to an attorney who can help you make sure you have a case and find the best possible outcome. Because a fiduciary relationship is not always contractual, it can be different than breach of contract, but you still may have legal recourse. You should explore your options to protect your best interests.