In the book, Attorneys' Legal Liability, Hinshaw & Culbertson LLP attorney Matthew R. Henderson discusses the fiduciary duties that form the foundation of the attorney-client relationship in the chapter "Breach of Fiduciary Duty".
The fiduciary duties of loyalty, confidentiality and honesty together form the foundation of the attorney-client relationship.These deep-rooted obligations enable the client to repose trust in the attorney, to reveal confidences, and to interact with the lawyer in such a manner that the attorney can zealously and effectively represent the client’s interests. Since the relationship between an attorney and his or her client is a solemn and vital one, safeguards are necessary to protect the client from overreaching and to ensure the integrity of the legal system. Violations of these fiduciary obligations may therefore lead to serious consequences for the attorney, including disqualification, disciplinary sanctions, and civil liability. This chapter deals primarily with a lawyers civil liability for fiduciary breach; additional remedies are discussed in other chapters.
In general a lawyer may be liable to the client in a civil action for a breach of fiduciary duty when the lawyer selfishly places his or her own interests ahead of those of the client and the client suffers damages as a result. A violation of the attorneys duty of undivided loyalty occurs when the interests of the attorney become adverse to those of the client, such as conflict of interest with another current or former client. A breach of the duty of confidentiality arises when the lawyer makes an unauthorized disclosure of the client's secrets or other privileged information. An attorney violates his or her duty of honesty by entering into unfair contracts with the client, by obtaining unwarranted gifts from the client, or by otherwise failing to exercise the highest degree of fidelity in his or her own dealings with the client.
Although a fiduciary duty runs from the attorney to the client as a matter of law, not every wrong committed by an attorney rises to the level of a breach of fiduciary duty. A claim for legal malpractice may be premised by a lawyer's mere negligence; however, an action for breach of fiduciary duty must implicate one of the specific fiduciary obligations owed to the client. Once such a breach has been established, the client must meet the burden of proving causation and damages, just as in a legal malpractice case. While the ethical rules governing the legal profession may be relevant to a lawyers standard of conduct, usually in the form of expert testimony, violations of these provisions are primarily enforced by the Attorney registration and Disciplinary Commission and do not create substantive rights for a client to recover damages in a civil action.
A claim for breach of fiduciary duty as a number of unique features. For instance, whenever an attorney enters into a business transaction with a client after the information of the relationship, the burden shifts to establish that the terms were just and consideration was fair. Fiduciary obligations may arise from communications with a prospective client, even when the attorney declines representation. Similarly, a lawyers duty to preserve client confidences lasts indefinitely beyond the termination of the client-attorney relationship--and even after the death of the client. An aggrieved client may be able to recover special damages in a fiduciary breach action, such as emotional distress or forfeiture of fees, which might not otherwise be available in a malpractice case. These distinctive aspects of the cause of action may provide a powerful weapon to a client who has been damaged by the conduct of his or her lawyer and may significantly increase an attorney's exposure to civil liability.
Ther topics addressed in the chapter include:
Read the entire chapter Breach of Fiduciary Duty.
This chapter was first published by IICLE Press.
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