Curran & Curran Law

A Boutique Employment Law Firm Representing San Diego

How to recognize a breach of fiduciary duty

On Behalf of | May 17, 2023 | Business Litigation

You understand that someone entrusted with a fiduciary duty must act in your best interests. This means that people in a fiduciary role must not make decisions or take actions that benefit themselves or other third parties. In the real world, recognizing when your California fiduciary is upholding this responsibility or self-dealing may be difficult. A decision that you disagree with may not automatically be against your best interests. However, fiduciaries oversee valuable assets and may succumb to the temptation to enrich themselves.

Signs of a fiduciary acting in good faith

A good fiduciary keeps you in the loop. Although you place certain responsibilities in the person’s or institution’s hands, you need to know important information whenever it arises. A fiduciary who updates you regularly and acts with transparency invites more confidence than one who limits access to information.

Because fiduciaries can run various enterprises, like a business or trust fund, conflicts of interest could come up. A fiduciary who discloses a conflict of interest demonstrates a commitment to ethical practices.

Legal elements of a breach of fiduciary duty

Sometimes doubts about a fiduciary go beyond replacing the person or organization. You may have cause to launch a legal action due to the damages caused by a fiduciary failing to meet obligations.

A lawsuit against a fiduciary must prove:

  • A duty existed – The person or organization understood its capacity as a fiduciary.
  • Duty breach – The fiduciary acted against your best interests.
  • Damages – You suffered identifiable damages because of the breach.
  • Causation – A direct link exists between the breach and damages.

A court may ultimately have to settle the differing interpretations of a fiduciary’s choices. Evidence should guide the determination of whose opinion on the matter represents reality.