When you hire an attorney, you trust them to put your interests first. But what happens when they act in their own interest? Or worse, act against yours? This can constitute a breach of fiduciary duty and may rise to the level of legal malpractice, warranting a lawsuit.
If you suspect your attorney didn’t act in good faith or violated your trust, the best thing to do is learn about your rights under California law. The fiduciary relationship establishes a wide range of obligations and responsibilities, and an attorney’s breach of these duties can manifest in an infinite number of scenarios. This article will examine breach of fiduciary duty under California law, explain the fiduciary relationship between an attorney and their clients, highlight common examples of how violations of this duty harm clients and develop into legal malpractice cases, and discuss the remedies available to clients.
If you believe your attorney violated their fiduciary duty and caused you harm, we encourage you to speak with an attorney who specializes in legal malpractice, as these cases are infamously complex.
What is a Fiduciary?
To understand an attorney’s breach of fiduciary duty, it’s crucial to have a general understanding of what a “fiduciary” is, as this relationship is not exclusive to the legal profession.
A fiduciary is someone who is legally and ethically obligated to act in the best interests of another party. The California Civil Jury Instructions define a fiduciary relationship as “any relation existing between parties to a transaction wherein one of the parties is in duty bound to act with the utmost good faith for the benefit of the other party.” Because fiduciaries are in a unique position to exploit the relationship for their own personal gain, it is of paramount importance that they avoid conflicts of interest and remain loyal.
A few examples of fiduciary relationships are:
- Trustees must responsibly manage trust assets for the beneficiaries.
- Financial Advisors are expected to recommend investments that are appropriate for their client.
- Corporate Officers must make decisions for the welfare of the company and its shareholders, not for their own benefit.
- Executors must stay faithful to the deceased person’s will when managing their estate.
- Lawyers and Attorneys must act in accordance with their clients’ legal interests.
As you can see, a key feature of any fiduciary relationship is the beneficiary’s expectation of utmost loyalty. This means the fiduciary must disclose all relevant information, avoid secret dealings, and always act with honesty. Breaching this duty is viewed as especially serious under California law because it involves betrayal, not just error.
An Attorney’s Fiduciary Duty to their Client
Under California law, an attorney owes their client one of the highest fiduciary duties recognized by the legal system. This duty and the obligations it imposes arise immediately upon the formation of the attorney-client relationship. It applies to all areas of the law, whether the attorney handles litigation, tax planning, corporate transactions, or regulatory compliance.
In essence, an attorney’s fiduciary duty to their client requires that they provide competent legal representation to their clients, maintain confidentiality, and always act in their client’s best interest. California courts consistently hold that lawyers must place their client’s interests above their own and avoid any conduct that benefits the attorney at the client’s expense.
California law also outlines many sub-duties for this overarching relationship of trust and confidence. Below, we outline some of the key components of an attorney’s fiduciary duty, as outlined in the State Bar of California’s Rules of Professional Conduct.
Duty of Competence and Diligence
California attorneys are required to provide legal services with reasonable skill, care, and diligence, consistent with the standards of the profession. This means a lawyer must possess the legal knowledge and preparation reasonably necessary for the representation. For example, if an attorney is not competent in the area of law they have been asked to provide representation in, they shouldn’t take on the case just because it could be an opportunity for a big payout.
A lawyer who takes on a matter they are unqualified to handle, fails to investigate key facts, misses deadlines, or neglects a client’s case may be found to have breached this duty. Furthermore, they may be sued for malpractice if their failures result in financial harm or a loss of legal rights for their client.
Duty of Representation and Allocation of Authority
This essentially outlines an attorney’s obligation to follow their client’s instructions (so long as the client’s directions are lawful). Substituting personal judgment for client authority, particularly in situations such as accepting settlement offers, choosing certain legal strategies, or making financial decisions, would constitute a breach of this duty and might give rise to a legal malpractice claim.
While attorneys should always advise their clients to the best of their ability and can use their knowledge to convince clients that one strategy or decision may be more beneficial than another, they ultimately cannot make decisions without first consulting their clients and obtaining their permission.
Duty of Communication
Attorneys are obligated to keep their clients reasonably informed about the status of their case. They must also respond promptly to a client’s questions or requests for information, such as case updates. Poor communication is a common complaint against negligent lawyers, and those who abandon their clients are often found liable for legal malpractice.
Fulfilling this duty may include providing timely updates about court filings, settlement offers, material changes in a case, billing issues, and any circumstances that could affect the client’s rights or interests. An attorney who fails to return calls or emails, withholds key information, significantly delays sharing settlement opportunities, or neglects to explain significant legal consequences may be breaching this duty.
Duty of Confidentiality
Lawyers must not share client information and cannot use confidential details for their own benefit or that of anyone else. This is one of the most basic duties that uphold the attorney-client relationship, and it extends beyond the end of the relationship as well.
The only time a lawyer may reveal confidential information about their client is if they have reason to believe that doing so will prevent someone from being seriously harmed. Otherwise, disclosing a client’s confidential information to anyone outside of the attorney-client relationship can constitute a breach of fiduciary duty and may pave the way for a malpractice suit.
Duty to Avoid Conflicts of Interest
Avoiding conflicts of interest is a strict obligation of an attorney’s fiduciary duty, as they jeopardize an attorney’s ability to serve their clients with undivided loyalty. Conflicts of interest exist when an attorney’s responsibility to another client, a former client, a third party, or their own personal or financial interests could materially limit their ability to fully and faithfully represent a current client.
When an attorney encounters a potential conflict of interest, California rules generally require that they identify it early, disclose it to the (potential) client (including a full explanation of how it may affect the representation), and, in some instances, obtain the client’s written informed consent before continuing. In many cases, though, an attorney cannot reasonably provide competent representation while a conflict of interest exists, and the most ethical choice is to decline the case, rather than seeking consent to continue. Conflicts of interest are some of the most common types of legal malpractice cases.
Duty to Account for Client Funds and Property
Any money or property belonging to a client must be adequately safeguarded, accounted for, and kept separate from the attorney’s own funds. Misuse or commingling of client funds constitutes a direct breach of California’s professional ethics and may form the basis of legal malpractice liability.
A breach of this duty can include mishandling funds held in trust, withdrawing fees without consent from the client, failing to provide an accurate accounting, or using client funds for purposes unrelated to the client’s matter. Billing abuses are also common, such as billing a client for unnecessary work or overbilling by charging for work the lawyer didn’t perform. This often happens when a client pays an advance retainer or deposit for future work.
What is the penalty for a breach of fiduciary duty?
Lawyers and attorneys can face serious consequences for breaching their fiduciary duties, even if those breaches do not amount to a legal malpractice claim. The responsibilities and obligations of the fiduciary relationship are fundamental to a lawyer’s ability to serve their client, and breaching these duties in California can result in both civil liability and professional discipline.
The State Bar of California may investigate and impose sanctions on attorneys who have breached their fiduciary duty, which can range from a formal reprimand to suspension or even disbarment, depending on the severity of the conduct.
While a breach of fiduciary duty does not necessarily constitute legal malpractice, legal malpractice cases very often originate from a lawyer’s violation of one or more of these ethics. If the client can prove that they were harmed as a result of the breach, and that they otherwise wouldn’t have suffered harm or would have benefited, a legal malpractice case becomes probable.
If the matter does enter the realm of malpractice, the client can file suit against their attorney in civil court by hiring a legal malpractice lawyer, and the client could be entitled to the following:
- Compensatory damages to remedy the losses caused by the breach.
- Disgorgement of fees, where the lawyer must forfeit any profits earned while representing the attorney disloyally or incorrectly.
- Punitive damages, while rare, may be awarded to clients in severe cases where the attorney acted with malice, committed fraud, or willfully disregarded the client’s interests.
Furthermore, a breach of fiduciary duty can be actionable even if it doesn’t meet all the technical elements of a legal malpractice claim. For example, a lawyer might fail to disclose a financial conflict of interest that didn’t directly alter the outcome of the case but still violated the client’s right to honest and transparent representation. In such cases, the client may still be able to pursue a claim for fiduciary breach, even if they cannot prove the negligence and damages that are pertinent to malpractice claims.
Ready to Speak with a California Legal Malpractice Lawyer?
An attorney’s breach of fiduciary duty is not only a betrayal of professional ethics, but can lead to measurable harm for clients. If you believe your attorney put their interests ahead of yours, whether through a hidden conflict, mishandling funds, or another betrayal of loyalty, you don’t have to deal with the aftermath on your own.
Stalwart Law Group is equipped to evaluate complex attorney misconduct and fight for clients whose lawyers have wronged them. Dylan Ruga, a partner at Stalwart Law Group, is certified in Legal Malpractice Law by the State Bar of California’s legal specialization program, a certification held by fewer than one-tenth of one percent of lawyers in Los Angeles County. Given that legal malpractice cases are infamously complex, Dylan’s rare specialization and knowledge afford his clients the most excellent legal representation California has to offer in matters of attorney negligence.
If you’ve found yourself frustrated, betrayed, and feeling lost after being mistreated and misrepresented by an attorney, no matter what field of law, Stalwart Law Group is here for you. The first step towards justice and financial compensation is as easy as a phone call. Contact our firm to discuss what happened, learn what evidence matters the most, and find out whether your situation supports a claim for legal malpractice based on your attorney’s breach of fiduciary duty. Our powerful legal team is ready to take on your case with confidence and conviction.
