Can you sue your lawyer for breach of fiduciary duty?

A fiduciary is someone trusted to act for another person's benefit. Lawyers are fiduciaries in the fullest sense. Their duties include loyalty (no hidden conflicts or self-dealing), candor (telling you the truth about your case), confidentiality, and safekeeping your money and property.

The ABA Model Rules spell out many of these duties. Rule 1.4 requires a lawyer to keep you reasonably informed. Rule 1.7 bars representation with a concurrent conflict of interest unless you give informed consent in writing. Rule 1.8(a) bars business deals with a client unless the terms are fair, disclosed in writing, and the client is advised in writing to seek independent counsel and signs a written consent. ABA Model Rule 1.8(b) forbids a lawyer from using information about your representation to your disadvantage unless you give informed consent. Rule 1.15 requires client money to be kept separate from the lawyer's own.

Typical fiduciary breaches include:

• Hiding a relationship with the opposing party or its lawyer.
• Charging more than the agreed contingency percentage.
• Settling multiple clients' claims in a lump sum without each client's informed, written consent.
• Talking a client into a loan to the lawyer or an investment in the lawyer's venture.
• Lying about offers, deadlines, or the status of the case.
• Using or holding client money improperly. See stolen client funds.

Group settlements get extra protection

When one lawyer represents many people injured in the same event, the temptation is to settle everything in one lump sum and divide it later. ABA Model Rule 1.8(g) forbids that unless each client gives informed consent in a writing signed by the client, and the lawyer's disclosure must include the existence and nature of all the claims and each person's share of the settlement. Under ABA Model Rule 1.8(g), a lawyer representing two or more clients may not make an aggregate settlement unless each client signs a written, informed consent that discloses every claim and every person's participation. The clients in Burrow v. Arce, described below, alleged exactly this kind of aggregate deal.

Rule 1.8(c) adds another bright line: a lawyer may not solicit a substantial gift from a client, or prepare a will or other instrument giving the lawyer or a relative a substantial gift, unless the lawyer is related to the client.

Courts separate claims about how well a lawyer did the work from claims about whose side the lawyer was on. Missing a deadline, misreading a statute, or poorly cross-examining a witness is negligence. Hiding a conflict, self-dealing, or lying is a fiduciary breach. Some states will dismiss a fiduciary claim that is really a negligence claim in disguise, so how the claim is framed matters.

The distinction matters because the remedies differ. Negligence requires proof that you lost money you otherwise would have had. A fiduciary breach can support remedies that do not depend on that proof. It is also why lying about the case is treated so seriously; see what to do if your lawyer lied to you.

The leading example is Burrow v. Arce (Texas Supreme Court, 1999). A chemical plant explosion led to a suit on behalf of some 126 plaintiffs that settled for close to $190 million, with the lawyers taking a contingent fee of more than $60 million. Forty-nine of those clients sued their lawyers, alleging, among other things, that the lawyers failed to investigate individual claims, failed to communicate offers, and settled in the aggregate. The Texas Supreme Court held in Burrow v. Arce that a lawyer who breaches a fiduciary duty may be required to forfeit all or part of the fee, whether or not the breach caused the client actual damages.

It is usually not a fiduciary breach when a lawyer makes a good-faith mistake, disagrees with you about strategy, or recommends a settlement you later regret. Those complaints, if anything, are negligence claims that need proof of loss. Our guide on what is not legal malpractice covers the common gray areas.

Most states require:

1. A fiduciary relationship, which exists automatically between lawyer and client.
2. A breach of loyalty, candor, or another fiduciary obligation.
3. Causation and damages for compensatory relief, or a benefit to the lawyer for disgorgement or forfeiture.

You usually need an expert witness on the lawyer's professional obligations. If you want compensatory damages, you usually also need to prove the case within a case: that without the breach, you would have obtained a better result.

A fiduciary breach can also be proved alongside negligence. In Rizzo v. Haines (Pennsylvania Supreme Court, 1989), a lawyer failed to tell his client about settlement signals from the city he was suing, then induced the client to transfer $50,000 to him, which the client believed was a loan. The trial court found negligent settlement, fraudulent inducement of the transfer, and improper accounting. In Rizzo v. Haines, the Pennsylvania Supreme Court affirmed a judgment of $530,000 in compensatory damages and $150,000 in punitive damages against a lawyer who mishandled settlement talks and took $50,000 from his client.

Fiduciary claims open up remedies beyond ordinary damages:

Remedy	What you recover	Key point
Compensatory damages	Your provable loss	Usually needs causation proof
Fee forfeiture	Some or all fees paid	Some states require no actual loss
Disgorgement	Profits the lawyer made	Focuses on the lawyer's gain
Punitive damages	Extra award to punish	Fraud or malice required
Interest	Time value of money taken	Rate set by state law or the court

In Burrow, the court listed what a judge weighs in setting forfeiture: the gravity and timing of the violation, its willfulness, its effect on the value of the lawyer's work, any other threatened or actual harm, and the adequacy of other remedies. Under Burrow v. Arce, the amount of fee forfeiture is a question for the court, not the jury.

States differ. Texas allows forfeiture without proof of actual harm. Not every state agrees, and some require the client to show injury before recovering any fees. Punitive damages are available in many states for intentional wrongdoing, as in Rizzo, but not for simple negligence. See what a malpractice case is worth.

Do not assume a fiduciary label buys you more time. California Code of Civil Procedure section 340.6 applies a one-year-from-discovery and four-year outer limit to claims against lawyers for wrongful acts in professional services, other than actual fraud. That means a California fiduciary claim that does not rest on actual fraud is usually on the same clock as malpractice. New York's CPLR 214(6) gives three years for malpractice, whether pleaded in contract or tort.

Some states apply a longer period to fiduciary or fraud claims, and many toll the clock while the lawyer conceals the facts or keeps representing you on the same matter under continuous representation. Look up your state on the statute of limitations table. If you are unsure which period applies, assume the shortest one until a lawyer tells you otherwise.

1. Request a full accounting of any money the lawyer held for you. ABA Model Rule 1.15(d) requires a lawyer to promptly render a full accounting on request.
2. Collect your fee agreement and settlement statement and compare the math.
3. Get your file. See how to get your case file.
4. Consider a bar grievance for serious deceit. Discipline does not pay you, but it creates a record.
5. Talk to a malpractice lawyer about which remedies your state allows.

If your lawyer put their interests ahead of yours, a free case review takes about two minutes and can connect you with an independent attorney in your state.