Is an expert needed to prove a breach of fiduciary duty? It depends….

Although attorneys have a fiduciary duty toward their clients, most errors and omissions by attorneys do not rise to the level of a breach of fiduciary duty. How it that possible? Legal malpractice claims generally involve questions about the quality of legal work.

A breach of fiduciary duty that merits a separate cause of action generally has to involve issues related to conflicts of interest, dishonesty, or immorality, such as an attorney misappropriating money or engaging in inappropriate conduct.

I have previously written about the necessity for a legal malpractice plaintiff to have an expert, but the question here is whether a claim for a breach of fiduciary duty against an attorney also requires an expert. The answer? It depends.

In a recent Connecticut Superior Court decision, two brothers hired an attorney to set up trusts to transfer assets to their respective children, while still maintaining control over the assets. The trusts were created, but instead of the trust being controlled by the two brothers, only one brother and the attorney were set up to manage the trust. This prevented one brother from having any control over the assets.

While there were several interesting issues raised by this case, the court found that the plaintiff’s failure to name an expert was fatal to the plaintiff’s legal malpractice claim. However, the court found that no expert was needed for the breach of fiduciary duty claim. The court made this finding despite rejecting one of the plaintiff’s key arguments on this point. 

In Connecticut, when there is a fiduciary relationship, and when the claims involve fraud, self-dealing, or a conflict of interest, the burden of proof shifts to the fiduciary to prove the transaction was fair.  The court in this case stated that in order for there to be a shifting of the burden of proof, the attorney would have had to have obtained a possible benefit from the transaction or there were suspicious circumstances. Apparently there was no allegation that the attorney had misappropriated trust funds. Without providing specific facts, the court concluded that the attorney was not going to financially benefit from the trust, and therefore, the burden did not shift to the attorney to prove that the transaction was fair. If the attorney-defendant did not have the burden, that would likely have meant the plaintiff would need an expert.

But that was only the first step of the court’s analysis.  The court concluded that despite the fact the burden was not shifted, the plaintiff still did not need an expert because the attorney-defendant claimed that the trust document defined the attorney’s duties as trustee. Essentially the court turned this into a breach of contract analysis and concluded that whether the attorney did or did not carry out the duties specified “seems well within the ability of common jurors to understand and decide. Unlike the issue of legal malpractice …. it does not require knowledge of the intricacies of estate planning, creations of trusts, funding of trusts, and transfers of assets in order to assess the conduct of the defendant.”

Though the plaintiff lost on one argument but ultimately prevailed on the main issue, my view remains: unless the specific circumstances of your legal malpractice/breach of fiduciary case have been previously found by the highest court in your state to not require an expert, an expert should be retained to avoid the possibility of dismissal because you failed to hire an expert.

Howard Altschuler

(Click here for a brief summary of my other blog posts on various legal malpractice related issues)
(Disclaimer: Please note that nothing in this blog or website is legal advice, and this post does not create an attorney-client relationship. You should always consult with an attorney for any legal malpractice issues, fee dispute, or ethical concerns that you may have. Thanks!)
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