Fiduciary Duty in a Nutshell
A criminal defence lawyer owes a duty of undivided loyalty to their client. This is called a fiduciary duty, coming from the Latin word “fiducia”, meaning trust or confidence.
In this article, we outline what fiduciary duty involves, when it doesn’t apply, and what a client can do if the lawyer breaches the duty. We also outline other duties that a lawyer owes to their client, because in practice there is overlap between them.
The Histry of Fiduciary Duty
Fiduciary duties and duties of good faith can be found in all kinds of legal systems, historically and today. Equivalent fiduciary duties are in Islamic law, Jewish Law, Chinese Law, Japanese Law, and many other traditions. Historically, in the English law tradition, the duty arose out of the idea of a “trust”. A trustee owes a fiduciary duty to the beneficiaries of the trust. The whole point of the exercise is so that beneficiaries can “trust” the trustee. From there, the idea expanded over the centuries.
Nowadays, other examples of fiduciary relationships include company directors’ duties and the relationship that arises between business partners. Potentially fiduciary relationships could arise wherever one party is clearly putting themselves in the position of relying on another party because of their superior expertise, knowledge or power. A good example would be financial advisors.
Fiduciary Duty – A Duty of Undivided Loyalty
There are two aspects to fiduciary duty. First, the lawyer must not put themself in a position of divided loyalties. In the criminal law context, an obvious example is where a lawyer acts for two or more defendants whose interests conflict.For example, if Defendant A says that it was all Defendant B’s fault, and Defendant B says it was all Defendant A’s fault, then the lawyer cannot act for both of them because the lawyer could not do everything ethical in their power for one client without damaging the other client.
Another example, which famously has occurred in Victoria, is where a defence barrister was secretly informing on her clients to the police, including using one client’s confidential information to land other clients in trouble. One of the (many) duties breached here was the duty to be loyal to their clients. It was a breach of her fiduciary duty to them.
The second aspect of the duty is that the criminal defence lawyer must put their client’s interests ahead of their own. Obviously, the lawyer can charge the agreed fee, assuming that the necessary formalities have been complied with. But the lawyer cannot make personal use of a client’s other funds or property. Nor can a lawyer have a secret side-agreement, for example with a media organisation, to “tell all”.
When Does Fiduciary Duty Apply?
For the criminal defence lawyer’s fiduciary duty to come into existence, there needs to be a contract between the lawyer and client, usually called a “retainer”. The law will then assume that there is a fiduciary relationship. This is an important pre-condition. Preliminary discussions with a lawyer to decide whether to retain them do not count.
It is theoretically possible that a court might find a lawyer owes a fiduciary duty to someone even without a retainer, but this would require very unusual facts. At the least, it is very uncertain.
When Does Fiduciary Duty Not Apply?
Following on from the above paragraphs, when the retainer is over, so that the lawyer no longer acts for the client, the fiduciary duty is over, but other duties may well continue, including a duty of confidentiality, discussed below.
A fiduciary duty might not arise, or might be restricted, if the client gives “informed consent”. For example, the client might agree that the lawyer can make some other profit from the relationship. In practice, a court would need a lot of persuading that the client knew what they were doing and made their decision freely. The best evidence would be that they went to another lawyer for advice before giving consent.
The other main circumstance where a fiduciary duty to a client does not apply or is weakened, is where the lawyer would be breaching their duty to the court or the administration of justice by being loyal to the client.
This is a fundamental feature of a lawyer’s ethics: duties to the court take priority over duties to the client. So, for example, if the client instructs the lawyer to mislead the court then the lawyer must not follow those instructions.
When Can a Client do if their Lawyer Breaches their Fiduciary Duty?
If a lawyer has betrayed the client, by putting their own interests ahead of the client, or by selling out the client to another person, or by disclosing confidential information, the client will certainly have grounds to complain to the disciplinary body in that jurisdiction. This could result in the lawyer being punished, and even struck off from practising.
It might or might not also result in compensation, but this really is something that is ordered by courts. It starts to get messy here because there are various branches of law which the lawyer might have contravened, and each branch has its own kind of remedies.First of all, the lawyer will probably have breached their contract with the client and this could result in a monetary payment called “damages”. The lawyer might also have committed a “tort”, or civil wrong.
Depending on the circumstances, it could be the tort of deceit, fraud or negligence.
However, a breach of fiduciary duty has its own set of remedies which are more flexible, although possibly less common. In addition to damages being ordered on a more generous payment, the lawyer might be required to pay the client any secret profit that the lawyer has made.The court could even impose a trust over property that the lawyer has acquired with the funds.
Also, in many parts of Australia, breach of fiduciary duty is not caught by “limitation periods”. In other words, there is no set period within which the client must bring their case against the lawyer. It is quite possible that the client is not so much interested in compensation but in having their conviction overturned. That is a complicated and evolving area of criminal law, which seems to be heading in this direction. The question that a Court of Appeal must decide is whether there has been a “substantial miscarriage of justice“.
Other Duties Owed by a Criminal Defence Lawyer to their Client
Lawyers owe many duties to their clients in addition to being loyal. In practice, these duties can overlap with each other, or a lawyer’s behaviour can breach more than one duty. Also, a breach of the duties below might also be a breach of fiduciary duty on the facts of the case, which is why they are included here.
The Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 summarises these duties as they now stand in relation to solicitors. (But remember, the lawyer’s duty to the court always takes priority over any duty to the client.)
1. A solicitor must act in the best interests of the client
This is more than just being loyal. It is a positive duty to do everything appropriate to serve the client; to go the extra mile. This principle also prohibits conflicts of interest between clients. If the lawyer has two clients with conflicting interests the lawyer cannot therefore act in the best interests of both of them.
2. A solicitor must be honest and courteous
This is probably wider than the fiduciary duty of loyalty. It might cover, for example, misleading a client in order to cover up a mistake by the lawyer.
3. A solicitor must deliver legal services competently, diligently and as promptly as reasonably possible
In the criminal defence context, this includes reading everything that is relevant, taking steps and objections that are reasonably open to the lawyer, and doing all this in a timely way. A lawyer who takes on a case outside their area of expertise might be in breach of this duty. A lawyer who takes on too much work and cannot attend to each client’s interests promptly might also be in breach.
4. A solicitor must avoid any compromise to their integrity and professional independence
Many breaches of fiduciary duty will also be a breach of this fundamental principle.
5. A solicitor must follow a client’s lawful, proper and competent instructions
A lot depends on what “competent” instructions are. Typically, the lawyer has more expertise in criminal law, the rules of evidence, police practice and the reality of how the criminal justice system operates. If a client wants to go against the lawyer’s advice, then the lawyer might question whether the client is “competent” to give those instructions. For example, the client might be unwell, under extreme stress or have a relevant disability. At the end of the day, with a client who is clear about what they want, the lawyer must follow those instructions, but they are likely to want to advise the client in writing that they disagree.
6. A solicitor must not disclose any information which is confidential to a client and acquired by the solicitor during the client’s engagement
There are numerous exceptions and qualifications to the duty of confidentiality. It is this duty which is most likely to overlap with the fiduciary duty of loyalty. Knowing that the two are theoretically separate is important, however, because the remedies for breach may be different. Also, the duty of confidentiality continues after the lawyer ceases to act for the client, whereas the duty of loyalty only applies during the retainer.
Summing up Fiduciary Duty and other Duties Owed by Criminal Defence Lawyers
The lawyer’s duty to their client as a “fiduciary” underpins the whole of legal ethics. There are, as we have seen, some ethical duties that do not raise issues of loyalty, even indirectly, but not many!
In practice, a client with a complaint, or a lawyer advising them, may start with the Solicitors’ Conduct Rules discussed above. These conveniently bring the various duties together, as do the equivalent rules for barristers, but it is important not to stop there. Most of the remedies for breach lie in other areas of the law, and there are important differences between those areas.
It all starts with loyalty. There is no point in having a defence lawyer who might be prompt, courteous and knowledgeable about the law if they also betray the client’s interest.
For more information on this topic, don’t hesitate to get in touch with the team at Galbally Parker lawyers As the first Melbourne firm to practice exclusively in criminal defence law, our criminal defence lawyers have the skill, experience and understanding to deliver the best representation for you or your loved one.
– Written by Emeritus Professor Stephen Parker, Galbally Parker
About Stephen Parker
Professor Stephen Parker was the Vice-Chancellor and President of the University of Canberra from 1 March 2007 until 1 July 2016. He was previously the Senior Deputy Vice-Chancellor at Monash University in Melbourne. Stephen has published books, monographs and articles on the court system, legal ethics, family law and children’s rights. He is also the co-author of a textbook called Law in Context, which is designed to introduce law students to the way that other disciplines view law.
He has held various major research grants in relation to projects on lawyers’ tactics, lawyers’ values, discretionary rules, family law, judicial independence and reform of civil procedure. In 2012 he was elected a Fellow of the Australian Academy of Law. Stephen was made an Officer of the Order of Australia (AO) as part of the Australia Day Honours in January 2014 for his distinguished service to tertiary education through administrative, academic and representational roles, and as a leader in the growth and development of the University of Canberra.
