Should I Sue for Breach of Fiduciary Duty?
Certain relationships create legal duties for individuals. For example, shareholders and executives of a company have an obligation to act in the best interests of their business. Because there are varying degrees of legal obligations which may be imposed depending upon the specific circumstances and the specific nature of relationships between people and businesses, there are different categories of obligations. The strongest duty under the law is called a fiduciary duty. When a fiduciary duty has been breached, those affected adversely by the breach can consult with a business litigation attorney about filing a lawsuit.
A civil suit is generally the process that is used to pursue a remedy when a breach of fiduciary duty has occurred; however just because it is possible to sue does not always mean that a lawsuit is the right choice. A business litigation attorney can help those involved in disagreements or disputes to determine if they should sue and can provide guidance and representation throughout the process of seeking a resolution to allegations that a fiduciary duty has been breached.
California Business Law Attorneys Brown & Charbonneau, LLP have extensive experience representing shareholders, business partners, and others who believe a fiduciary duty has been breached. When you need a lawyer who can help you to decide whether to sue and who can assist in making a compelling argument for compensation when a duty is breached, our legal team is here for you. Call now to learn more.
A Business Litigation Attorney Will Help you to Determine if You Should Sue
A fiduciary duty is imposed in situations where it is of paramount importance that an individual fulfill his obligation to act solely in another party’s interests. It is the highest duty imposed by the U.S. legal system. The party or parties who the duty is owed to are referred to as principals.
As the Legal Information Institute explains, fiduciaries may not profit from the relationship that they have with the principal, unless the fiduciary first gets the informed, express consent of the principal. A fiduciary has to avoid any conflicts of interest that may arise between his or her own interests and the interests of the principal, as well as avoiding any conflicts that may arise between different clients of the fiduciary.
A fiduciary relationship exists between lawyers and clients; between shareholders and directors; between business partners; and in many other business relationships. The first step in determining if you should sue when you believe the duty has been breached is to determine if the specific relationship in question actually created a fiduciary duty under the law.
If you can prove a fiduciary relationship existed, you must prove that a breach occurred and that the defendant acted on his or her own behalf instead of acting in the best interests of the principal. Finally, you must prove that the breach caused harm for which compensation is available. It is important to be sure you can prove every element of your case before deciding to file a civil lawsuit, as you do not want to spend time and money going to court only to be unable to prevail and obtain the legal remedy you seek.
Deciding Whether to File Suit for Breach of Fiduciary Duty
When you believe you have a case for breach of fiduciary duty, suing still may not be the best option. First and foremost, you need to determine if you have an arbitration agreement, as arbitration clauses are common in business documents. If you have signed a contract agreeing to arbitrate disputes, you won’t be able to sue but will need to resolve your disagreements through arbitration.
Even if you can sue and don’t have to submit your case to arbitration, think carefully about whether this is the right choice. Going to court can be time consuming, stressful and expensive and can turn private disputes into a matter of public record. The litigation process is also, by nature, adversarial. If you have a business partner you believe has breached a fiduciary duty but you will need to work out your differences to continue operations, litigation could exacerbate the problems and make the situation worse. While disagreements like this do need to be resolved, alternatives such as mediation may be a better option.
A business litigation attorney at Brown & Charbonneau, LLP can carefully review your situation and help you to determine if litigation is the best way for you to proceed when you believe a fiduciary duty has been breached. Our legal team can represent you whether you decide to sue, whether you opt to mediate to find a resolution to your disagreement, or whether you submit your case to arbitration. Give us a call at 714-505-3000 or contact us online as soon as you suspect a fiduciary obligation to you has gone unmet so we can begin protecting your interests.