Birmingham Breach of Fiduciary Duty Attorney

Elements of Breach of Fiduciary Duty

Breach of fiduciary duty occurs when someone is obligated to act in the interests of another person but fails to do so. There are four elements that must be proven in order to file lawsuit for monetary damages:

• Duty. There must be a special relationship of trust between two parties, such as a trustee and beneficiary, an employee and employer, or an attorney and client.
• Breach. It must be proven that one party did something contrary to the other party’s interests, therefore violating their duty.
• Causation. It must be proven that the breach of duty caused you to suffer damages.
• Damages. There must be losses involved in order to recover damages.

Examples of Breach of Fiduciary Duty

Breach of fiduciary duty can happen in the following relationships:

• Agents and principals. These breaches often occur in an employment relationship. An employee may breach their duty to an employer if they refuse to follow directions, share trade secrets, act in the interest of a competitor, or profit at the employer’s expense.
• Partners. Partners have a duty to act in the best interests of their company. Common breaches of duty include illegal behavior, negligence, mismanaging company assets, and counseling important information from others.
• Board of directors. A board of directors has a duty to make decisions on behalf of the company. They breach this duty when they prevent shareholders from voting, refuse to pay dividends, deny shareholders access to records, and force out minority shareholders.