Report Fiduciary Obligations 8.01-8.05

7/25/2019 Report Fiduciary Obligations 8.01-8.05

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CHAPTER VIII

LAWYERS FIDUCIARY

OBLIGATIONS


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ABIGAI MA!I" #MAI $ %"!NAND"&' !N'

MAN#!IS D*C+*!

A.EFFECTS OF FIDUCIARY RELATION

FIDUCIARY - n. from the Latin fiducia, meaning"trust," a person (or a usiness !ie a an or stoc

roerage# $ho has the po$er and o!igation to act

for another (often ca!!ed the eneficiar%# undercircumstances $hich re&uire tota! trust, good faith and

honest%.


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'he most common is a trustee of a trust, ut

fiduciaries can inc!ude usiness adisers, attorne%s,

guardians, administrators of estates, rea! estate

agents, aners, stocroers, tit!e companies or

an%one $ho undertaes to assist someone $hop!aces comp!ete confidence and trust in that person

or compan%.


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Characteristica!!%, the fiduciar% has greater

no$!edge and e)pertise aout the matters

eing hand!ed.


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A fiduciar% is he!d to a standard of conduct andtrust aoe that of a stranger or of a casua!usiness person.

*e+she+it must aoid "se!f-dea!ing" or "conf!ictsof interests" in $hich the potentia! enefit to thefiduciar% is in conf!ict $ith $hat is est for theperson $ho trusts him+her+it.

FIDUCIARY RELATION


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For e)amp!e, a stocroer must consider theest inestment for the c!ient and not u% or se!!on the asis of $hat rings him+her the highestcommission.

hi!e a fiduciar% and the eneficiar% ma% ointogether in a usiness enture or a purchase ofpropert%, the est interest of the eneficiar% must

e primar%, and aso!ute candor is re&uired of thefiduciar%..


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8.01. GENERALLY'he $e!!-esta!ished ru!e that the re!ation

of attorne% and c!ient is high!% fiduciar%

and strict!% confidentia! re&uiring utmost

/ood faith

Lo%a!t%

Fide!it%

Disinterestedness

ATTORNEY


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0 'he position of an attorne% ena!es him to put in hispo$er, and opens him to the temptation to aai!himse!f, not on!% of the necessit% if his c!ient ut of hisgood nature, !iera!it% and credu!it% to otain undue

adantages, argains and gratuities.0 'he $e!!-esta!ished ru!e that the re!ation of attorne%

and c!ient is high!% fiduciar% and disinterestedness onthe part of the attorne% is designed to remoe a!! suchtemptation and to preent eer%thing of that ind from

eing done for the protection of the c!ient.


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8.02. DEALINGS WITH CLIENT

CLOSELY SCRUTINIZED

0 A fiduciar% re!ationship e)ists as a matter of !a$et$een attorne% and c!ient1

0 It is the court2s dut% to !oo into dea!ings et$eenattorne%s and their c!ients and to guard and protect the

!atter from an% undue conse&uences resu!ting from asituation in $hich the% ma% stand une&ua!.

0 hi!e a !a$%er is not arred from dea!ing $ith his c!ientin usiness transaction, the same is disfaored and hisusiness dea!ings must e characteri3ed $ith utmosthonesty and good faith.


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0 'he measure of good faith $hich an attorne% is re&uiredto e)ercise in his dea!ings $ith his c!ients is a muchhigher standard than is re&uired in usiness dea!ings$here the parties trade at 4arms !ength.5

0 hen there is a usiness transaction et$een anattorne% and his c!ient, the urden of proof rests uponthe attorne% to sho$ that the transaction is fair, e&uita!eand ust, and that it did not proceed from undueinf!uence, and that the propert% so ac&uired does not

e!ong constructie!% to the c!ient.


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8.03. ABUSE OF CLIENTS

CONFIDENCE

0 A !a$%er shou!d refrain from an% action$here% for his persona! enefit or gainhe auses or taes adantage of the

confidence reposed in him % his c!ient.0 A !a$%er ma% not retain the mone% of

one c!ient to force a sett!ement of the

disputed c!aim of another c!ient againstthe former.


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0 An attorne%, confronted $ith the situation ofdra$ing a $i!! for a friend or a re!atie $ho$ishes to mae a e&uest to him or to amemer of his fami!%, shou!d tae intoconsideration 'he conf!ict of interests1

'he incompetence of a !a$%er-eneficiar% to testif%

ecause of a transaction $ith the deceased1 'he possi!e eopard% of the $i!! if its admission to

proate is contested1

'he possi!e harm to the other eneficiaries, and

'he undermining of the pu!ic trust and confidencein the integrit% of an attorne%.


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0 'he mere e)istence of a confidentia!re!ation et$een a testator and his!a$%er $ho is eneficiar% under the $i!!

does not per se raise an inference ofundue inf!uence, ut the inference on!%arises $here the attorne% acts asdraftsman and other persuasiecircumstances.


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0 'he attorne% ma% dra$ a $i!! in that

situation $here undue inf!uence ma% not

e inferred and $hat he ma% receie %

$a% of e&uest is reasona!e and no

more than $hat $ou!d e receied under

the !a$.


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8.04. REBATES AND COMMISSIONS

0 A !a$%er sha!! not, $ithout the fu!!no$!edge and consent of the c!ient,accept an% fee, re$ard, costs

commission interest, reate orfor$arding a!!o$ance or othercompensation $hatsoeer re!ated to hisprofessiona! emp!o%ment from an%oneother than the c!ient.


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0 'his is to secure the attorne%2s

$ho!ehearted fide!it% and to preent the

situation $here the receipt of reates or

commission from another in connection

$ith the c!ient2s usiness ma% interfere

$ith the fu!! discharge of his dut%.


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0 hateer the !a$%er receies from the

opposite part% in the serice of his c!ient

e!ongs to the c!ient, in the asence of

his c!ient2s consent made after fu!!

disc!osure of the facts.


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8.05. A LAWYER SHALL NOT BORROW

FROM, NOR LEND MONEY TO, CLIENT

0 R!" 1#.04.01A !a$%er sha!! not orro$

mone% from his c!ient un!ess the c!ient2s

interests are fu!!% protected % the nature of

the case or % independent adice. 'his is intended to preent the !a$%er from taing

adantage of his inf!uence oer the c!ient. 6en if he

can orro$ such as $hen the c!ient2s interests are

protected, he shou!d not ause the c!ient2sconfidence % de!a%ing pa%ment.


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0 R!" 1#.04.02 7either sha!! a !a$%er !endmone% to a c!ient e)cept, $hen in the interestof ustice, he has to adance necessar%e)penses in a !ega! matter he is hand!ing forthe c!ient. 'his is intended to assure the !a$%er2s independent

professiona! udgment, for if the !a$%er ac&uires a financia!interest in the outcome of the case the free e)ercise of his

udgment ma% e aderse!% affected.

'his ma% !ead the !a$%er to consider his o$n recoer%rather than that of his c!ient.

Report Fiduciary Obligations 8.01-8.05

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