Abstract

A fiduciary duty is a loyalty obligation or a good faith to a person or an entity. Typically, the most challenging situation in a fiduciary theory of law is to understand the conflict of interest involved. Usually, legal literature of fiduciary duty assumes that people are inclined to act interestedly while on the other hand, they could be weak to resist an urge when managing the interests of another person. A conflict of interest occurs when a person with a duty to exercise judgment benefits for another person has interests that can interfere with the proper exercise of discretion. According to various interdisciplinary theories of conflict of interest, personal interests unpredictably interfere with decision making. Fiduciary duties are based on rules which must be strictly imposed, for example, in fiduciary duties, one should not profit from properties held in the capacity of fiduciary. In fiduciary duties, confidentiality and undivided loyalty must be exercised.

Keywords: Fiduciary, duties, conflict of interest, law, honesty, clients, entity, party

Regarding the addressed scenario, the invoked fiduciary duty is loyalty whereby as a company’s agent, one ought to have undivided loyalty to the organization represented. As an attorney representing an insurance company, I am supposed to put the client’s interests above my own. The decision to serve the mediator can be termed as self-interest which then becomes a breach of fiduciary duty. As a lawyer, one should not have the option to look out for number one; instead, they have a fiduciary duty to clients and require to act in their best interest. The attorney-client relationship is strong since the company has put trust on me as a representative. Thus, it is only living up by duty that would ensure existing trust is not violated. The scenario presents a self-dealing opportunity which is a conflict of interest as it involves making profits hence fiduciary duty breach. Other invoked fiduciary duties include disclosure, confidentiality accounting, and obedience. The attorney should disclose any relevant information received which could benefit the position of the client in a negotiation. For example, as an attorney representing the insurance company, I ought to disclose information about the approach made by the mediator.

An attorney has a fiduciary duty to avoid conflict. When representing a client’s matter, one should avoid situations which might create a conflict of interest, for example, taking other clients with opposing interests. Such an act is termed as competing for the same contract. The steps to mitigate potential conflicts is to avoid them in the first place. One should not accept responsibilities which are incompatible with the existing interests. Another step is to disclose roles and responsibilities in public and to seek mediation assistance from a third party. Conflict of interest situation would affect my plan for Alternative dispute resolution (ADR) by demanding to seek immediate assistance from impartial third parties. The third party would be involved since professional integrity has been compromised by the conflict

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