Define: Fiduciary Negligence

Fiduciary negligence refers to a breach of the duty of care owed by a fiduciary to their beneficiaries or clients. Fiduciaries, such as trustees, agents, or financial advisors, are legally obligated to act in the best interests of those they represent, placing the interests of the beneficiaries above their own. Fiduciary negligence occurs when a fiduciary fails to fulfil their duties with the level of care, skill, and diligence that a reasonable person in a similar position would exercise under similar circumstances. This negligence may involve acts of omission, such as failing to monitor investments, make timely distributions, or provide accurate advice, as well as acts of commission, such as self-dealing or conflicts of interest. Fiduciary negligence can result in financial losses or harm to the beneficiaries, and fiduciaries may be held liable for damages resulting from their negligent conduct.

A situation whereby an individual does not honour their fiduciary obligations or responsibilities by failing to act on breaches of fiduciary duty when doing so may have prevented the infractions. This is considered to be professional malpractice. A fiduciary is still considered to be negligent, even if they did not benefit from their actions.

This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

This glossary post was last updated: 29th March 2024.