If one or both of these two co-fiduciaries breach their obligations resulting in harm to the beneficiary, each can be individually liable for the entire sum of damages. Joint fiduciary liabilityĬo-fiduciaries can result from having joint trustees or joint executors, meaning the duty and any resulting liability is joint and several. For example, if a trustee breaches his or her fiduciary duty owed, s/he can be held personally liable for the resulting damages. Personal liabilityĪ fiduciary can sometimes be held personally liable if they violate their duty. This can be the case even if the third party doesn’t owe its own fiduciary duty to the plaintiff. Who’s liable for a breach in fiduciary duty? Third-party liabilityĪ third-party defendant can be held jointly and severally liable for knowing participation in another’s breach of fiduciary duty. And we love working with co-counsel across the country and are happy to have a free no-obligation consultation with anyone, as to whether a potential violation may have occurred. At its most extreme, breach of fiduciary duty may involve a criminal act, such as theft or embezzlement on the part of a shareholder or partner. We can evaluate a fiduciary’s actions and can determine whether or not a breach occurred. A fiduciary may be able to avoid liability for breach of fiduciary duty by seeking the informed consent of his principal (i.e. Free No-Obligation Review of Your Potential Case Law firms across the country work with us as co-counsel on cases that require sophisticated investigation and working with experts whose reputations in their respective fields are at the very top. General Motors, which we took to the U.S. Our team of experienced litigators have experience from coast to coast in high-stakes precedential litigation, including Baker v. Some common examples of a fiduciary breaching a fiduciary duty include a trustee selling trust assets to a relative or customer of the trustee an executor of an estate paying him or herself for services to the heirs for a higher than agreed upon rate or, a director or officer making a business decision that benefits him or herself, but harms the company. Fiduciary relationships can include but are not limited to: Some of these require examination of fiduciary accounts from experienced counselors who are familiar with this type of investigation and examination. The failure to perform the duties of a trustee.A breach of fiduciary duty can take many forms. In terms of compensation, the trustee is liable to restore the trust estate to the same position as it would have been had no breach occurred.Īlternatively, a trustee may have to account to the beneficiaries for any profit that that was made as a result of the breach of trust or in the ordinary course of the management of the trust. The principal remedies that a beneficiary may seek as against a trustee who has breached trust is compensation and account of profits. When those duties are not complied with, it constitutes a breach of fiduciary. a duty on the part of the fiduciary not to unlawfully profit from their privileged position as a fiduciary. a duty to avoid conflicts of interest with the principal. This statement excludes successor trustees and co-trustees, who also, in limited circumstances have standing to bring a cause of action for breach of trust.Ī trustee also has a fiduciary relationship with a beneficiary and therefore if a trustee is found to have breached trust by putting their interests over and above the interests of the beneficiaries, they will also be answerable in equity to a breach of fiduciary duty. The duties imported into any fiduciary relationship are: a duty to act in good faith to the principal. If a breach of trust occurs generally speaking and pursuant to Occidental Life Insurance Co of Australia Ltd v Bank of Melbourne (1991) 7 ANZ, “no one can obtain redress for a breach of trust except a beneficiary or someone who stands in his shoes, like his personal representative or trustee in bankruptcy”. However in New South Wales, a trustee may be relieved from a breach of trust if a Court finds that pursuant to section 85 of the Trustee Act 1925 (NSW) if: A breach of trust refers to the conduct a trustee appointed under a trust and their failure to discharge their duties as stipulated by the trust instrument and general duties under law (See Re Spedding NZLLR 447).Ī trustee may also be found to have breached a trust if they fail to discharge their duties “reasonably, in good faith and for the purposes for which they were conferred” (see Walker v Stones QB 902.
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