May an attorney be held liable for aiding and abetting a fiduciary breach? A recent law review article raises the issue and advocates the view.
The article isn’t written for an ERISA audience, but it suggests the idea – should attorneys be held liable for advising ERISA fiduciaries on actions that are found to constitute a fiduciary breach?
From the article:
Applying aiding and abetting liability to breaches of fiduciary duties creates clear liability for those who assist in such breaches. Unless a wealth of close cases exist in which an attorney’s loyalties would be divided between zealously representing a client and protecting him-or herself from a lawsuit, no beneficial policy exists that justifies creating an exception for attorneys who assist clients in breaching a fiduciary duty.
Attorneys who aid or advise clients in perpetrating frauds or engaging in illegal activity may be held liable for their actions, and indeed the attorney-client privilege is not available for communications regarding the fraud or crime. The reasoning behind such a rule is that society rightfully wishes to discourage attorneys from making such suggestions to clients. The same rationale applies to advising clients to breach fiduciary duties. Since such advice is to be discouraged, attorneys who proffer it should be held liable to the extent they cause harm.
See, Kevin Bennardo, The Tort Of Aiding And Advising?: The Attorney Exception To Aiding And Abetting A Breach of Fiduciary Duty, 84 N. Dak. L. Rev. 85 (2008)
(cross posted to erisaboard.com)