Many clients trust their attorney with more than their personal information. Many transactions require that the attorney hold onto some of the client’s money or other valuables, at least for awhile.
Someone who handles money that belongs to another party is called a fiduciary, with the party to whom the funds belong known as the principal. Obviously, this arrangement takes a great deal of trust on the principal’s part. To help protect him or her, the law includes what is called the fiduciary duty. This outlines the fiduciary’s obligations. An attorney who breaches his or her fiduciary duty toward one or his or her clients has committed legal malpractice, and may be liable for damages.
The most basic duty of a fiduciary is to be loyal. In other words, the fiduciary must put the principal’s interests first, before the fiduciary’s own interests. If the attorney has a conflict of interest or fails to disclose material facts to the client, that could be a breach of fiduciary duty.
Fiduciaries also owe a duty of care. This means he or she must carry out his or her responsibilities by acting as a prudent person would if he or she were handling the funds him- or herself. If the fiduciary has any special skills, perhaps like legal knowledge, his or her duty includes using those skills.
A breach of fiduciary duty can be very costly to the victim. Besides the financial hit, the victim may also lose the ability to trust people. A legal malpractice suit may restore their confidence in the justice system.