Derivative Action in UK Law

Leading Cases
  • Johnson v Gore Wood & Company (A Firm)
    • House of Lords
    • 14 Diciembre 2000

    On the other hand, although a share is an identifiable piece of property which belongs to the shareholder and has an ascertainable value, it also represents a proportionate part of the Company's net assets, and if these are depleted the diminution in its assets will be reflected in the diminution in the value of the shares. The correspondence may not be exact, especially in the case of a company whose shares are publicly traded, since their value depends on market sentiment.

  • Iesini v Westrip Holdings Ltd
    • Chancery Division
    • 16 Octubre 2009

    I should begin by saying a little about derivative claims generally. In the first place the new code has replaced the common law derivative action. A derivative claim may “only” be brought under the Act. As section 260 (1) makes clear a derivative claim is one in which the cause of action is vested in the company, but where the claim is brought by a member of the company.

    A derivative claim, as defined by section 260 (3) is not, however, confined to a claim against the insiders. As the concluding part of that sub-section says, the cause of action may be against the director or another person (or both). Nevertheless the cause of action must arise from an actual or proposed act or omission involving negligence, default, breach of duty or breach of trust by a director of the company.

    The Act now provides for a two-stage procedure where it is the member himself who brings the proceedings. At the first stage, the applicant is required to make a prima facie case for permission to continue a derivative claim, and the court considers the question on the basis of the evidence filed by the applicant only, without requiring evidence from the defendant or the company. The court must dismiss the application if the applicant cannot establish a prima facie case.

    However, in order for a claim to qualify under Part 11 Chapter 1 as a derivative claim at all (whether the cause of action is against a director, a third party or both) the court must, as it seems to me, be in a position to find that the cause of action relied on in the claim arises from an act or omission involving default or breach of duty (etc.) by a director.

  • Carlos Sevilleja Garcia v Marex Financial Ltd
    • Supreme Court
    • 15 Julio 2020

    For example, in Peak Hotels and Resorts Ltd v Tarek Investments Ltd [2015] EWHC 3048 (Ch), the judge considered it arguable that the “reflective loss” principle, as explained by Lord Millett in Johnson, did not bar proceedings by a shareholder, who complained of a fall in the value of his shares resulting from loss suffered by the company in respect of which the company had its own cause of action, where the relief that he sought was not damages but a mandatory injunction requiring the defendant to restore property to the company.

  • Stainer v Lee & others
    • Chancery Division
    • 29 Junio 2010

    On the other hand, it may be in the interests of the Company to continue even a less strong case if the amount of potential recovery is very large. The necessary evaluation, conducted on, as Lewison J observed, a provisional basis and at a very early stage of the proceedings, is therefore not mechanistic.

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Legislation
  • Companies Act 2006
    • UK Non-devolved
    • 1 de Enero de 2006
    ...... of the company to bring proceedings to restrain the doing of an action that is beyond the powers of the directors. . . But no such proceedings ...11 . Derivative claims and proceedings by members Part 11 . Derivative claims and ......
  • Sanctions and Anti-Money Laundering Act 2018
    • UK Non-devolved
    • 1 de Enero de 2018
    ...... the purposes of implementing Standards published by the Financial Action Task Force relating to combating threats to the integrity of the ... representing securities, bonds, notes, warrants, debentures and derivative products; . (d) (d) interest, dividends and other income on or value ......
  • Income Tax Act 2007
    • UK Non-devolved
    • 1 de Enero de 2007
    ...... . . (e) a charitable housing trust,. . . (f) a housing action trust established under Part 3 of the Housing Act   1988 (c. 50) . ,. . ... section 778 (income arising where capital amount other than derivative property or right obtained), and. . . (b) on individuals to whom income ......
  • The Over the Counter Derivatives, Central Counterparties and Trade Repositories (Amendment, etc., and Transitional Provision) (EU Exit) Regulations 2019
    • UK Non-devolved
    • 1 de Enero de 2019
    ....... In particular— . . (a) the Bank of England shall — . (i) take action in accordance with paragraph 3 of Article 5; and . (ii) review the technical standards on margin requirements laid down in Article 41; . . (b) the ......
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Books & Journal Articles
  • Stepping Stones — from Corporate Fault to Directors' Personal Civil Liability
    • Núm. 40-2, Junio 2012
    • Federal Law Review
    Several recent cases have seen the courts approving ASIC's employment of a ‘stepping stone’ approach that applies directors‘ statutory duty of care as well as their other statutory duties in a nove...
    ......The first 'stepping stone' involves an action against a com pany f o r contravention of the Corporations Act 2001 ... approach is that directors may face a type of derivative civil liability for corporate fault. In this paper we ana lyse the ......
  • THE THEORY AND POLICY OF SHAREHOLDER ACTIONS IN TORT
    • Núm. 50-4, Julio 1987
    • The Modern Law Review
    ...... P brought a derivative action based on the alleged breach of fiduciary duty5 and also a representative personal action6 seeking a ......
  • Notes Of Cases
    • Núm. 44-2, Marzo 1981
    • The Modern Law Review
    ...... NOTES OF CASES DERIVATIVE ACTIONS AND Foss v. HARBOTTLE SIXTY-NIN,E days of argument ......
  • Professor Wedderburn writes
    • Núm. 33-3, Mayo 1970
    • The Modern Law Review
    ...... exercising their powers may be liable in a derivative action brought by an individual, commonly minority, ......
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Law Firm Commentaries
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