Lawyers are being sued in Texas for Participation in Fiduciary Breaches.
It is not unusual for attorneys to fulfill all or a portion of a client’s wishes. This could violate the fiduciary responsibility that the client owes to an unrelated party. The third-party may claim that the client has violated the fiduciary’s obligations. However, can this third party also be able to sue the attorney for participation in the client’s actions?
A director or officer of a company can set the business of a competitor and then direct the company’s business to the competing business. Suppose the director or officer hires an attorney to help establish the business. The attorney is aware that the new business is likely to be used to take advantage of opportunities. Can the business take legal action against the attorney who helped establish the business? What happens if the attorney, the owner of the company that is being formed or is employed by the company in a non-legal capacity?
It is evident, at a minimum, under specific theories, third parties may be held accountable for their participation in fiduciary violations by the person liable for fiduciary obligations. Does the third party have to be an attorney? Before Cantey Hanger LLP (Cantey Hanger, LLP) v. Byrd, 467 S.W.3d 477 (Tex. 2015), It was not clear in Texas the possibility that a person could bring a lawsuit against an attorney who is not representing the client for negligence, such as false representation or aiding and aiding fraud or breach of the fiduciary obligation. Some courts permitted the claim if the attorney was guilty of or taking part in fraud. Others did not.
The plaintiff in Cantey Hanger alleged that lawyers who represented her husband in divorce proceedings committed fraud by graduating a sale bill to avoid tax liability due to the sales of the aircraft by her spouse to her. Id. at 479-80. at 479-80. Texas Supreme Court held that attorney immunity did not apply to the case because “[e]ven the conduct is ‘wrongful within the scope of a lawsuit is not an actionable matter if it is not a part of the lawyer’s responsibilities in representing their client. ‘” Id. At 481. Here are the most important excerpts of the report:
Texas common law is established that an attorney doesn’t oblige a professional duty of care to any third party who suffers harm due to the attorney’s incompetence in representing clients. Barcelo v. Elliott, 923 S.W.2d 575, 577 (Tex. 1996) See also McCamish, Martin, Brown & Loeffler v. F.E. Appling Interests 991 S.W.2d 787 792 (Tex. 1999) (explaining that the absence of privity prevents attorneys’ obligation to non-clients in the event of legal mistakes). Yet, Texas courts have developed an affirmative defense that is more extensive in safeguarding attorneys from responsibility to clients who are not their clients, following the broad declaration made over 100 years back that “attorneys are permitted to practice their profession and to counsel their clients and intervene in any defense or pretense of defense, but without being accountable for any the damages.” Kruegel v. Murphy, 345 S.W. 343, 345 (Tex. Civ. App. 1910, with writ ref, ‘d). This attorney immunity defense is designed to guarantee “loyal and faithful an aggressive representation for attorneys working to represent clients.” Mitchell v. Chapman 10, S.W.3d 810 812 (Tex. App.–Dallas 2000, pet. denied).
To this end, there is a consensus in the appellate courts that, in general, attorneys are exempt from civil liability for non-clients “for actions that are taken as a result of representing clients in court.” Alpert v. Crain, Caton & James, P.C., 178 S.W.3d 398, 405. (Tex. App.–Houston [1st Dist.] 2005, pet. denied) See also Toles 2005, Pet. denied; see also Toles. Toles, 113 S.W.3d 899 910 (Tex. App.–Dallas 2003, no pet. ); Renfroe v. Jones & Assocs., 947 S.W.2d 285 287-88 (Tex. App.–Fort Worth 1997, Pet. denied). Even ” wrongful actions with in connection with the action” can’t be brought into action if it’s “part of the exercise of the lawyer’s responsibilities as a lawyer representing his customer.” Toles, 113 S.W.3d at 910-11;
In contrast, attorneys aren’t legally protected from liability to non-clients for their conduct if they cannot be considered “the type of conduct which an attorney is engaged in the course of performing his duties towards his clients.” Dixon Fin. Servs., 2008 Tex. App. LEXIS 2064 2008 WL 746548 at *9; the case of Chapman Children’s Trust v. Porter & Hedges, L.L.P. 32 S.W.3d 429, 442 (Tex. App.–Houston [14th Dist.] 2000, pet. refused) (noting the fact that “it is the nature of the conduct that determines the conduct, not whether the behavior is exemplary or not”).
The focus in evaluating an attorney’s liability to a non-client is “on the nature and not the form of the lawyer’s conduct” an all-inclusive fraud exception would substantially weaken the defense. Dixon Fin. Servs., 2008 Tex. App. LEXIS 2064, 2008 WL 746548, at *8. Simply naming an attorney’s behavior “fraudulent” is not sufficient and shouldn’t remove it from the realm of representation for clients or render this “foreign to the responsibilities as the attorney.” Alpert, 178 S.W.3d at 406 (citing Poole, 58 Tex. at 137). See also Dixon Fin. Servs., 2008 Tex. App. LEXIS 2064 2008 WL 746548 at *9 (“Characterizing the actions of an attorney in advancing the rights of his client as defamatory does not alter the law that states that an attorney is not found liable for not performing his obligations to his client.”)
It isn’t an exclusion to immunity for attorneys; instead, the defense doesn’t apply to fraudulent behavior beyond the realm of legal representation of his client. Similarly, it doesn’t extend to other illegal actions that are not within the boundaries of expression. Attorneys who assert an affirmative defense of immunity to an attorney are required to show that the alleged wrongdoing, regardless of whether or not it’s deemed fraudulent, is in the performance of his obligations to his customer.
Id. at 481-484.
Based on the ruling In Cantey Hanger in Cantey Hanger, if an attorney is doing the work a lawyer is expected to undertake, the attorney-independence defense will apply. This defense also applies to helping and abetting fraud and breach of fiduciary duty. See Kastner v. Jenkens & Gilchrist, P.C., 231 S.W.3d 571, 577-78 (Tex. App.–Dallas 2007); Span Enters. v. Wood, 274 S.W.3d 854, 859 (Tex. App.–Houston [1st Dist.] 2008).
In Bethel v. Quilling, Selander, Lownds, Winslett & Moser, P.C., the Court extended the Cantey Hanger rule to the allegations of criminal behavior. 595 S.W.3d 651, 657-58 (Tex. 2020). The plaintiff asked the Court “to acknowledge the exception” to immunity for attorneys “whe[nan outside party claims that an attorney was involved in criminal acts during the process of litigation.” The Court agreed. The Court declined to make an exception or an absolute rule, as this would allow plaintiffs to avoid the attorney immunity defense by using a sophisticated pleading–“by simply claiming that an attorney’s conduct was ‘criminal. ‘” Id. The Court did not adopt a categorical exemption for criminal activity because this would be contrary to the purpose of the attorney immunity defense. Instead, the Court determined that conduct that is believed to be criminal “is not exempted from the protections provided by attorney civil immunity if the conduct is in connection to representing a client in the course of litigation.” In d. We explained that lawyers performing their job are not subject to civil liability because non-clients claims their actions were illegal, fraudulent, or even illegal. Id.
In 2021 in 2021 in 2021, the Texas Supreme Court further clarified the ruling in Cantey Hanger, stating it follows that “When an attorney is involved personally in a fraudulent business plan alongside his client instead of on behalf of his client, the attorney will not be found guilty of denying his responsibility since such actions are unrelated to the responsibilities that attorneys.’” Haynes & Boone, LLP v. NFTD, LLC, 631 S.W.3d 65, 777 (Tex. 2021) (quoting Poole v. Hous. & T.C. Ry. Co., 58 Tex. 134, 137 (1882)). The Court in Haynes & Boone, LLP, also expanded the Cantey Hanger holding to extend to the transactional work that an attorney is responsible for and litigation activities covered within Cantey Hanger. Cantey Hanger’s opinion:
Today, we have confirmed that attorney immunity applies to claims that arise out of litigation, as the conduct is similar to the “kind” that we have discussed above. We arrive at this conclusion because there is no significant distinction between the context of litigation and the non-litigation setting. We have granted immunity to attorneys at all. We have recognized the immunity of attorneys since attorneys are required to effectively, efficiently, and vigorously defend their clients’ rights while abstaining from any conflicting obligations or obligations towards themselves or others.
Id. at 79.
In the most recent case, Taylor in Taylor. Tolbert, the Court examined whether there is an exception to immunity in civil suits claiming that lawyers have committed a crime as defined by law. No. 20-0727, 2022 Tex. LEXIS 385 (Tex. May 6, 2022). The Court debated the immunity defense in the following manner:
The common law attorney-immunity defense applies to legal work in “all situations where attorneys are required to faithfully and zealously represent the client”; however, only if the legal claim against the attorney is dependent on “the nature of the actions” attorneys perform while fulfilling their professional duties towards clients. In the opposite case, if an attorney is involved in conduct that isn’t a “lawyerly job” and is “entirely different from the duties of an attorney” or is outside the realm of representation of clients, The defense against attorney immunity is not applicable.
To determine if the conduct constitutes “the type” immunity covers that it is, the question is based on the kind of conduct, not the actual wrongdoing of the behavior. If the defense prevails to counsel, they are protected from liability in a civil lawsuit but not “other ways” in place “to hinder and rectify” wrongdoing or bad faith, including discipline, sanctions, or criminal sanctions, as appropriate.
It is not the type of conduct that attorney immunity covers “simply because attorneys are often involved in the same practice” or that an attorney was involved in the act on behalf of a client. Instead, the show must require “the particular lawyerly capabilities” and the attorney’s expertise in the capacity of an attorney. For instance, an attorney who makes public statements to the media or on social media on behalf of clients behalf “not have the office or professional training, skills and the authority as an attorney’” because “[a]nyone–including press spokespersons, agents, or those with no experience or qualifications–can make public the client’s claims with the help of the media.” It is only permissible if the attorney is fulfilling “lawyerly” obligations to their client
The other consequence of this rule is that lawyers won’t be protected by civil immunity for conduct “entirely out of the scope as an attorney.” “Foreign in the duties of an attorney” does not mean that there is something an experienced attorney shouldn’t perform. It simply means that the attorney has acted in a way that is not consistent with their role and an attorney’s capacity. This is why the question of the possibility of counsel claiming immunity is contingent on the work being carried out, not the fact that the conduct in question was exemplary.
This is due to the clients’ interests requiring that lawyers “competently effectively, efficiently and with zealously defend their client’s interests while abstaining from any conflicting obligations or obligations they have to them or others.” To ensure that there is no chilling effect on the lawyer’s dependable performance in the obligation, attorneys should be able to exercise legal rights they consider essential and appropriate for their clients without the threat of civil liability hovering over them and impacting their decisions. Attorney immunity promotes “loyal, faithful and aggressive representation” through “essentially . . . Eliminating the fear of personal liability,” which in turn “alleviating for an attorney the fear of being liable to be sued or be held accountable to a client who is not the client for the services provided . . . an ardent representation.” This way, defense is not just for lawyers but for their clientele who are confident that counsel is pursuing clients’ best interests, not the attorney’s.
Id. Id. Court admitted it was confirmed that “there is a wide array of criminal behavior that is not covered by the “scope of representation for clients and is therefore outside the scope of the duties of an attorney” and “when it is so, the circumstances don’t provide an exception in defense of immunity. Rather this kind of conduct is deemed to fail to meet the criteria to invoke immunity defense in the first place.” The Court ruled. “[O]ur strategy for applying the attorney-immunity defense is functional rather than qualitative, making an attorney’s improper behavior apprehensible to public remedies.” Id.
The Court also ruled that attorneys’ common law defense of immunity could still be applied to state laws (unless the statute explicitly rescinds the reason). Id. The Court declared:
This does not mean that any conduct that is criminalized under this statute will be exempt from civil liability or without consequences. In Bethel, although criminal behavior is not explicitly excluded from the defense of attorney immunity, it is also not protected by security. Illegal activity may be out of the scope of the exemption for attorneys; however, even if it is not, “nothing in our attorney-immunity law affects the attorney’s criminal liability if the behavior is a crime.”
Id. Concerning federal statutes in the case, the Court found “that attorney immunity in the sense that it is recognized and defined in Texas law, isn’t an exception to the wiretap laws of federal law since the common law defense in a state does not have any application to the federal laws.” Id.
Based on the initial research, any of the attorneys’ claims who work for clients (whether illegal, tortious as well as criminal) are covered under immunity granted to attorneys and would exclude any involvement in a breach of fiduciary duty case. However, suppose the alleged misconduct involves the attorney directly receiving the benefit of the transaction or being a part of the deal (as opposed to being an attorney on behalf of the transaction as a participant). In that case, the immunity will not be applicable. See, e.g., Olmos v. Giles, No. 3:22-CV-0077-D, 2022 U.S. Dist. LEXIS 777134 (N.D. Tex. April 28, 2022) (refused to dismiss the breach of fiduciary duty claim and the misrepresentation claim of attorneys when it was not clear if the defendant’s attorneys were an element of the deal).
Another subject that needs to be addressed is the effect on the attorney-client privilege when an attorney engages in criminal or fraud actions. The request of the attorney-client cannot be respected in cases where “the professional services provided by the attorney were sought out or sought to assist or permit any person to commit something that the client reasonably could have believed to be an offense or fraud.” Tex. R. Evid. 503 (d)(1). As one Court describes:
The exception is only applicable if (1) an initial argument is presented about possible fraud or a crime, or (2) it is possible to establish a connection between the document that is at issue as well as the primary evidence provided. A prima facie proof is considered sufficient when it provides the evidence that, if taken as accurate by a trier of facts, could establish the elements that constitute a crime or fraud that “was taking place or was likely to occur at the time the document was written.” A court can review the document to determine if prima facie evidence is established.
The first step is looking at the scope of the fraud component in the exception to the rule against fraud and crime. The Texas Rules of Evidence do not specify what is meant under Rule 503(d)(1) with the words “to commit . . . Fraud.” Black’s Law Dictionary defines fraud as “A deliberate misrepresentation of the factual information or the concealment of a significant fact that causes someone else to take action in a detrimental way to the victim.” It is a Texas criminal tort known as fraud that requires evidence of concealment, misrepresentation, or not disclosing. The concept of fraud is legal and is, therefore, based on the notion of concealment or misrepresentation. This definition also dovetails with the apparent reasoning behind the inclusion of fraud in the exception: keeping client communications confidential-pursuant to the attorney-client privilege -the attorney whose client intends to make a misrepresentation or concealment helps prevent the injured party from learning the truth about the misrepresentation or concealment. In this case, the attorney’s silence aids the client in the commission of the offense. This isn’t always the case for other types of tort (not caused by fraud or concealment) and is why this isn’t the exception for committing a crime or tort.
Steps of Effective Leadership Development Program Plans.
A well-thought-out leadership development program offers opportunities and clear guidance for your workers to enhance their abilities and grow their careers. With a wider skill set, they’ll have the tools they need to assist your business in moving forward. It’s a win-win scenario for both you along with your workers.
However, a development plan or program shouldn’t be designed in the nick of time. Follow these steps to ensure that your employees’ plans for professional development are on the right track. Follow this guide to know more.
Effective Career Development Plans
Step 1: Think about your goals for the business.
Before setting goals for your employee development program, ensure that you align your employee’s goals for their development with the requirements of your business. Take into consideration your long-term and short-term business objectives.
Do you need someone from your sales team to be a district manager? Do you require someone in accounting to know how to utilize and use new software?
You’ll be able to determine the needed abilities, know-how, skills, and knowledge to achieve your goals once you’ve identified them.
If, for instance, your business is growing rapidly, it may be necessary to hire more leaders. What qualifications do they require? Does any of your employees currently have the knowledge or the ability and the desire to develop the competencies needed for these roles?
The development of internal candidates to connect the current skills of employees and those of the future would be extremely beneficial for the business. Investments in employee development today will save costs and time in the long run regarding onboarding, recruiting, or training employees. In addition, creating an employee’s career path and showing the possibility of advancement and promotions can help you keep the best talent.
Step 2: Discuss the matter with your employees
Please don’t presume that you know your employees’ levels of expertise and career goals. Discuss with everyone on your team to know more about their professional goals.
Having your employees evaluate their work and discuss the challenges they face within their current roles is also advisable. Which areas are they experiencing the greatest difficulty in? Are they in need of some additional education, mentoring or an assignment that is challenging?
Certain employees have career goals, But they’re not sure what to do next or if the organization will be supportive of their plans. Others may not be aware that you can see their potential or need encouragement to grow in their career.
When you speak to employees, you can work together in determining what role your business could play in their goals and the opportunities you could offer them.
Step 3: Define the potential and the readiness
After you’ve provided leadership and management education, evaluate your employees, and bear in mind the difference between readiness and potential. For instance, Michael may have the potential to become a superstar manager, but he’s not yet ready to assume this job. The definition of readiness can vary, including desire, skill and experience. Michael might want to pursue the managerial job you have in mind for him but isn’t yet. He might be taking care of parents who are elderly or children and isn’t keen to travel.
Additionally, he may have the time and energy required for a new job. Or, he could need between two and three years in increasingly challenging assignments. Furthermore, this is the time to acquire the management skills needed in the new job.
Leaders often think of someone who excels at selling or manufacturing widgets (potential). They also assume they are great at managing the sales team or manufacturing widgets (readiness). Management and doing require different skills, and the employee is forced into employment. Furthermore to this, they aren’t prepared for the negative outcomes.
Do you want to quit your job in Dubai? These are the five steps to follow.
Gulf News speaks to UAE legal professionals about the steps employees should follow when quitting.
Dubai: You may be contemplating quitting your job as a full-time employee in the UAE. What happens if my manager refuses to accept or acknowledge my resignation. How can I ensure I have no problems moving to a different job?
Gulf News interviewed legal experts in UAE to determine the best steps for employees to take to avoid financial or legal liability when they quit their full-time jobs. The steps below are only for employees with full-time jobs. They are based on UAE’s new Labour Law, Federal Decree-Law No. 33 of 2022 – and its governing regulations.
1. To ensure you give the correct notice period, read your employment contract.
According to the UAE Labour Law, the notice period for a full-time employee who wants to end a work contract may be between 30 and 90 days. Your labor contract will specify the notice you must give to your employer. You can find our detailed guide on how to get a copy of your labor contract here.
Failure to fulfill your notice period could result in financial liability. You may be asked for your salary for the period you did not serve, according to Priyasha Corrie (Partner at Keystone Law Middle East LLP).
She stated that Article 43(3) of UAE Labour Law requires parties to compensate each other. This is a ‘payment in lieu notice’ equivalent to an employee’s salary for the whole notice period or a portion thereof.
You should keep some things in mind if you’re resigning within your probation period. Our detailed guide explains how to resign during probation.
2. Resign in writing
Corrie advised employees to notify their employer in writing of their decision to resign, via email or by letter. It is crucial to indicate your notice period and the last day of your work following your labor contract. This is required by Article 43 (1) of UAE Labour Law.
What happens if my employer doesn’t respond to my resignation email
According to Dr. Ibrahim Al Banna (CEO of Ibrahim Al Banna Advocates and Legal Consultants), while employees are required to submit their resignations in writing, acknowledgment from the employer is not required under the UAE Labour Law.
Dr. Al Banna stated that the employer does not have to acknowledge the notification.
3. Receive all your end-of-service dues
Your gratuity will be calculated according to Article 51 of UAE Labour Law once you have served your term as a full-time employee. You must note that gratuity will be calculated on an employee’s basic pay.
Dr. Al Banna stated that when calculating gratuity for a foreign employee, an employer must, according to Article 51 (5), calculate it based on the previous basic salary to which the employee was entitled, regardless of whether the employee receives a salary on either a weekly, monthly, or daily basis.
The gratuity paid to a foreign employee shall not exceed two years’ remuneration. The employer can deduct any amount due to him or her, following the law or a judgment rendered by a competent judge, when determining the gratuity amount.
4. Ensure that your work permit is cancelled
Concerning Executive Regulations of Labour Law, the employer must apply to the Ministry of Human Resources and Emiratisation to cancel the work permit. Dr. Al Banna states that the employer must also apply for cancellation of visas with the General Direction of Residency and Foreigners’ Affairs (GDRFA Dubai) or the Federal Authority for Identity, Citizenship and Ports Security(ICP) if the employee was under the sponsorship.
“Once the visa and work permit is canceled, information indicating that they have been canceled will be entered into the MOHRE/GDRFA database. Dr. Al Banna stated that employers had restricted access to the database.
Although you are not allowed to access the databases of the authorities as an employee, your employer should send you cancellation papers detailing when your visa and work permit was canceled and the length of your stay in the UAE.
The visa and permit have been canceled. This gives the employee only 30 days to enter into a new employment relationship or exit the UAE. Dr. Al Banna stated they would be fined if the employee failed to establish a new employment relationship or exited the UAE without a valid visa.
5. For any questions, contact MOHRE
Lawyers also advised Gulf News to contact the Ministry of Human Resources and Emiratisation for any clarifications on the new Labour Law. For more information, contact the Ministry.
HOW TO SURVIVE A JOB INTERVIEW IN ENGLISH.
In English, we frequently talk about “surviving” an interview. Sometimes, simply surviving isn’t enough. You have to be able to show the interviewer what an excellent candidate you are should you want to be hired for your dream job. While specific interview questions are more challenging than others, you will still get an edge over your competition by knowing how to handle these simple English questions during the interview. Sit in a comfortable position and get yourself ready to tackle these English job interview-related questions.
Tell me more about your personal life.
It’s not a question but rather an invitation to provide more information. It’s still a popular method of opening an interview, however. Keep in mind that the interviewer is looking to learn about your skills related to your job rather than what you’re doing in your private life. Don’t mention, “I was born in Taipei,” “I like playing computer games,” and “I am the youngest of my two brothers.” Talk about your career progress, the lessons you’ve learned, and particular skills that allow you to be a suitable candidate for this position.
Don’t hesitate to sell yourself! The trick to answering this question is providing specific examples and supporting them with proof. Don’t just answer: “I’m organized, punctual, and well-liked with my colleagues.” You should follow up any information you state with “For instance” …” and elaborate on how you demonstrated your skills in your previous position.
What are your reasons for wanting to be a part of our team?
Employers would like to know why you’re interested in working for them. Therefore, show them that you know the company’s work and that you’re excited about your job. Don’t begin by saying, “Umm,” “I don’t know,” It seemed like a good choice for my career,” or “I haven’t found any other interesting information.” Go online and research the company before you interview to ensure that you can provide specific reasons as to why you’d like to join the company. Remember that the interviewer needs to understand what you could bring to the company rather than what the company could bring to you!
What made you quit your previous job?
Perhaps the last position you had was a disaster. However, an interview isn’t the right time to discuss the issue. If it’s true, do not make negative or opinionated remarks regarding your former or current colleagues or employers: “I didn’t agree with the direction of the company,” “I got no acknowledgment for my work,” “My boss was unjust.” Such statements can make you appear unprofessional. Instead, concentrate on positive reasons to leave, such as the desire to take on new challenges or expand your knowledge.
Have any questions you’d like to ask me?
Interviewers typically end their interview by asking this question. Make sure you ask specific questions that demonstrate that you know the basics about the company, but you’d like to know more. Be sure to ask questions you already know the answers to, such as, “What does your company does?” Or, “Could you give me your name repeatedly?” Also, don’t inquire about salary or vacation-related questions: “When do you give raises?” “How much vacation time should I anticipate?” Save those questions to ask after you’ve heard, “We’d like to give you the job.”
Remember that the most important thing to do for an interview is to be prepared. Research thoroughly and ensure you know the company’s mission and job before going into the interview. Be relaxed and remember that you were invited to the interview because the company is looking for your skills. Be sure to answer these questions and make use of them as a base to ensure you are successful at that subsequent English employment interview.
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