When an individual or company acts as a fiduciary, they are held to a high standard of care. This means that they must always act in the best interests of their clients or beneficiaries. If they do not, they may be liable for a fiduciary breach. Here are the elements of a fiduciary breach claim in New York.
Fiduciary breach elements
- The plaintiff must show that the defendant owed them a fiduciary duty. This can be established by showing that the parties had a special relationship, such as being trustee and beneficiary or employer and employee.
- The plaintiff must also show that the defendant breached their duty of care. Your fiduciary owes you the utmost level of good faith and loyalty. So, if they act negligently or recklessly at your cost, you can sue for fiduciary breach of duty.
- The plaintiff must show that they suffered damages due to the breach. In business litigation, you must show the court that you suffered some form of economic loss, reputational damage, or future losses.
- The plaintiff must show that the damages incurred are directly linked to the fiduciary actions. You must show the court that the fiduciary conduct was the substantial contributing cause of the losses suffered.
Consequences of a fiduciary breach in New York
The court could hold the individual or company involved in the fiduciary breach responsible for damages caused by their actions. This can include financial losses resulting from lost income and property as well as emotional distress due to embarrassment and humiliation.
The court will also suspend or remove the fiduciary from their duty. They could follow this up with a jail sentence plus fines, especially if the breach included embezzlement, fraud, or theft.
It is important to note that not all breaches of fiduciary duty give rise to a legal claim. In order to have a valid claim, you must be able to show that the defendant’s actions caused you harm. If they did, file a fiduciary breach claim as soon as you can.