Damages for Breach of Fiduciary Duty - Transcript

If a financial professional breaches a fiduciary duty, the resulting damages can significantly impact your financial wellbeing. Unlike breach of contract cases, which often rely on the terms of the agreement, damages in breach of fiduciary duty cases depend on the specific statutes and legal principles governing the claim. This can make cases involving a breach of a fiduciary duty much more complex. At Malecki Law, our New York-based securities lawyers help investors pursue fair compensation for the harm they’ve experienced at the hands of financial professionals who breached their fiduciary duty.

In breach of fiduciary duty cases, the types of damages awarded depend on the circumstances of the case and the statutes under which the claim is brought. Typical damages include:

1. Compensatory Damages:
   These damages aim to reimburse the injured party for the financial harm they suffered due to the breach. Examples include:
   • Net Out-of-Pocket Losses: In securities law, net out-of-pocket (NOP) Losses refer to the actual financial losses an investor incurs due to their investment in a security, after accounting for any gains, income, or proceeds related to that investment. This calculation is commonly used to measure damages in securities fraud or misrepresentation cases
   • Lost Profits: Earnings the injured party would have received but for the fiduciary’s misconduct.
   • Well-Managed Account Damages: In securities cases, these damages measure how the account should have performed had it been properly managed.
2. Consequential Damages:
   These damages compensate for secondary losses that resulted from the breach, such as additional fees, interest, or costs incurred to mitigate the harm.
3. Punitive Damages:
   In cases of egregious misconduct, courts may award punitive damages to penalize the fiduciary and deter similar behavior. However, punitive damages are less common and often depend on the specific facts of the case.

At Malecki Law, we work with clients to calculate and document these damages, ensuring that all financial harm is accounted for in their claims.

When a fiduciary relationship is governed by a contract, the terms of the agreement often dictate the types of damages that can be sought. For example, contracts may include:

• Liquidated Damages Clauses: Pre-agreed amounts for specific breaches.
• Attorney’s Fees Provisions: Terms indicating whether legal fees can be recovered.
• Limitations on Damages: Clauses restricting the types or amounts of damages that can be claimed.

If the contract is silent on these matters, courts typically rely on common law or statutory principles to determine damages. For instance, under common law, injured parties may seek compensatory damages to restore them to the position they would have been in had the breach not occurred.

Malecki Law analyzes contracts to identify potential remedies and ensures that clients understand their rights and options under both the agreement and applicable laws.

Statutory provisions often influence the calculation of damages in breach of fiduciary duty cases. For example:

• Attorney’s Fees and Costs: Some statutes provide for the recovery of legal fees and court costs.
• Interest on Damages: Certain laws may allow for the accrual of interest on monetary awards.
• Enhanced Damages: In some cases, statutes provide for additional or multiple damages to penalize fiduciaries for specific types of misconduct.

Understanding the applicable statutes is critical to maximizing recovery in breach of fiduciary duty cases. At Malecki Law, we carefully review the legal framework for each case, ensuring that all available remedies are pursued.

To maximize recovery, it is essential to take the following steps:

1. Document All Losses: Keep detailed records of financial harm, including account statements, communications, and contracts.
2. Analyze Legal Options: Work with an experienced attorney to evaluate whether the case is governed by contract terms, statutes, or common law.
3. Present Expert Testimony: In cases involving complex financial harm, expert analysis can help quantify damages accurately.

At Malecki Law, we guide clients through this process, leveraging our experience in securities law and breach of fiduciary duty claims to build strong cases for recovery.

If you’ve suffered financial harm due to a breach of fiduciary duty, Malecki Law is here to help. Our experienced attorneys are dedicated to ensuring you recover the damages you deserve and holding fiduciaries accountable for their misconduct. Call us today at 212-943-1233 to speak with a New York securities law attorney. You can also complete our confidential online contact form and we will promptly get back to you. We represent investors in New York, throughout the United States, and across the globe.

Transcript:

So damages in a breach of contract case may be specified by contract so the contract can say under which you get liquidated damages or the way damages will be calculated or it may omit to say those things but when you have a contract with someone you can specify our attorney’s fees collectible or not so on breach of contract you’d look to the contract first and if the contract is silent you’d look at common law in statutory cases of where there’s a fiduciary you have to look at each statute that you’re bringing the case under to see whether it provides for things like attorneys fees interest costs well-managed theories of Damages or other theories of net out-of-pocket losses things like that.