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Fiduciary duty claims and elements of a breach

On Behalf of | Mar 5, 2021 | Civil Litigation

Breach of fiduciary duty is a claim that a fiduciary is neglecting their duties. The fiduciary should be acting in the interests of their principal. The law states that if this is not happening, one can take a fiduciary before a Texas judge. Read on to discover more about fiduciary duty claims and elements of a breach.

What is a fiduciary?

A fiduciary is any person or entity assigned an ethical or legal responsibility of assets for another party. The relationship encompasses a good faith belief that the fiduciary will perform duties in the sole interest of a plaintiff.

Elements of a breach

When considering a breach claim, there are certain things that must be proven in court. It may be considered a breach of fiduciary duties under the following conditions:

  • The defendant was legally acting as fiduciary on behalf of the plaintiff.
  • The defendant breached fiduciary responsibility.
  • The plaintiff was a victim of damages because of the breach.
  • The defendant’s fiduciary breach directly resulted in plaintiff’s damages.

Causation

A plaintiff has to show that the defendant’s actions were the substantial and operative cause of negative consequences. The court may need to find a defendant’s actions culpable for loss of profits, out-of-pocket losses, mental anguish damages and exemplary damages.

Consequences of a breach of fiduciary duty

When a fiduciary is in breach, the victims can take legal action. It starts with a civil lawsuit. This happens if the parties cannot resolve the conflict in arbitration or mediation.

Mediation is voluntary, and parties can come to an agreement through the proceedings. With arbitration, a moderator will make a binding decision. Arbitration is usually the go-to when there’s a contract between parties.

If the party proves fiduciary negligence, there can be a claim of breach of fiduciary duty. Proving negligence entails showing the court evidence that the fiduciary failed to fulfill their legal obligations. Plaintiffs have to show how the fiduciary enriched themselves at the expense of the plaintiff. They need to be ready to prove beyond a preponderance the impact of damages and then prove the amount in order to win the case. An attorney may be helpful in gathering and presenting evidence in court.