‘Mr Chohan and Mr Ved knew each other from childhood. From 2008 Mr Ved ran his accountancy business, Sterling Associates, from part of the premises comprising 5TC pursuant to a series of licence agreements with the then tenant of 5TC, Eutopia Ltd (“Eutopia”).’
Gatehouse Chambers, 28th May 2024
Source: gatehouselaw.co.uk
‘ClientTEarth v Shell [2023] EWHC 1897 (Ch) is the first attempt to use the statutory shareholder derivative action (Part 11 Chapter 1 of the Companies Act 2006 (CA 2006)) to hold directors liable for breach of directors’ duties for issues related to climate change. A derivative action can be used by shareholders in limited circumstances to bring an action of recourse on behalf of the company. Derivative actions are typically used to protect minority shareholders. Therefore, its use in ClientEarth v Shell is of interest, especially considering the ongoing discussion on the role and purpose of business in society. Although company law has primarily focused on profits, the more modern view is that companies should exist for profit, public interests and societal goals (See British Academy, Reforming Business for the 21 st Century: A Framework for the Future of the Corporation). The ClientEarth case confirms and clarifies situations in which a claimant may obtain permission to continue a claim; and when an absolute liability may be imposed on directors for a climate change-related breach of director’s duty in shareholder derivative claims. It raises questions around the prospects of success for future claimants due to the difficulty in establishing sufficient legal merit; and the relationship between stage one and stage two of the statutory regime.’
Cambridge Law Journal, 3rd April 2024
Source: www.cambridge.org
‘The Court of Appeal dismissed the appeal in Durnont Enterprises Ltd v Fazita Investment Ltd [2024] EWCA Civ 299 against the refusal of permission to continue a derivative action against the sixth, seventh and eighth defendants to the claim.’
Gatehouse Chambers, 12th April 2024
Source: gatehouselaw.co.uk
‘ClientEarth v Shell [2023] EWHC 1897 (Ch) is the first attempt to use the statutory shareholder derivative action (Part 11 Chapter 1 of the Companies Act 2006 (CA 2006)) to hold directors liable for breach of directors’ duties for issues related to climate change. A derivative action can be used by shareholders in limited circumstances to bring an action of recourse on behalf of the company. Derivative actions are typically used to protect minority shareholders. Therefore, its use in ClientEarth v Shell is of interest, especially considering the ongoing discussion on the role and purpose of business in society. Although company law has primarily focused on profits, the more modern view is that companies should exist for profit, public interests and societal goals (See British Academy, Reforming Business for the 21 st Century: A Framework for the Future of the Corporation). The ClientEarth case confirms and clarifies situations in which a claimant may obtain permission to continue a claim; and when an absolute liability may be imposed on directors for a climate change-related breach of director’s duty in shareholder derivative claims. It raises questions around the prospects of success for future claimants due to the difficulty in establishing sufficient legal merit; and the relationship between stage one and stage two of the statutory regime.’
The Cambridge Law Journal, 3rd April 2024
Source: www.cambridge.org
‘In McGaughey v USS Ltd [2023] EWCA Civ 873, two active members of the Universities Superannuation Scheme (the “USS”) applied for permission to continue a derivative action on behalf of the corporate trustee of the USS, Universities Superannuation Scheme Limited (“USSL”), against its current and former directors. USSL is a company limited by guarantee of which its directors were the members. By the derivative action, the two USS active members sought to cause USSL to sue the corporation’s directors for alleged breaches of the duties owed by the directors to USSL. The Court of Appeal refused to permit the claim to go forward.’
Pensions Barrister, August 2023
Source: www.pensionsbarrister.com
‘UK businesses should be aware of a growing trend of climate change-based litigation according to one expert, after environmental law charity ClientEarth announced legal action against Shell.’
OUT-LAW.com, 18th March 2022
Source: www.pinsentmasons.com
On 21 April 2020, Zacaroli J allowed an appeal brought against the decision of HHJ Saunders in Homes of England v Nick Sellman (Holdings) Limited. The case concerned Bromham Road Development LLP (BRD), a limited liability partnership which owned the freehold of a property situated at 51 Bromham Road, Bedford (the property). Homes of England (HoE) and Nick Sellman (Holdings) Limited (Holdings) are each 50% partners in BRD. HoE alleged that Holdings, in breach of duties of honesty and good faith owed to HoE, and in breach of a duty to act in the best interests of BRD, delayed in executing documentation required to refinance the property. HoE alleged that this delay increased the amount required to redeem BRD’s original loan from Wellesley Finance plc by £206,933.21.
Hardwicke Chambers, 1st May 2020
Source: hardwicke.co.uk
‘Shareholder claims principally consist of unfair prejudice petitions (UPPs), instigated by members on their own behalf, and derivative actions (DAs), brought by the members on behalf of the company. Dinglis v Dinglis [2019] and Tonstate Group Ltd and Ors v Edward Wojakovski [2019] have developed the law surrounding a shareholder’s ability to bring UPPs and DAs. They involve family-run companies, providing cautionary tales for family members who choose not to formalise matters sufficiently.’
Law Society Gazette, 23rd September 2019
Source: www.lawgazette.co.uk
‘A Court of Appeal decision upholding the parties’ choice to use English law under a swap agreement will provide some relief to financial firms despite the ongoing uncertainty around the UK’s decision to leave the EU, an expert has said.’
OUT-LAW.com, 21st June 2017
Source: www.out-law.com
“It has long been recognised in English law that as an exception to the rule in Foss v Harbottle a member of a company may bring an action on its behalf against wrongdoers who exert control over the company and who are preventing it from enforcing its rights, i.e. the single derivative action. A multiple derivative action potentially arises where the proposed claimant is not a member of the wronged company but is a member of the ultimate holding company. Since the coming into force of the Companies Act 2006, there has been considerable debate as to whether that legislation removed the common law double derivative action or even, in some quarters, whether such a common law action ever existed.”
Full story (Word)
New Square Chambers, 17th May 2013
Source: www.newsquarechambers.co.uk
“English common law recognised multiple derivative actions before the coming into force of the Companies Act 2006 and they had survived the coming into force of that Act.”
WLR Daily, 26th February 2013
Source: www.iclr.co.uk
“A derivative claim brought by limited partners in a partnership, in the partnership’s name, against the partnership’s manager was permitted where there were special circumstances to justify such a claim.”
WLR Daily, 16th November 2012
Source: www.iclr.co.uk
Bamford v Harvey and another [2012] EWHC 2858 (Ch); [2012] WLR (D) 298
“‘Wrongdoer control’ of a company was not an absolute preclusive condition for the bringing of a derivative claim. However. where proceedings clearly could have been brought in the name of the company and no objection was raised on that ground, they should be so brought.”
WLR Daily, 18th October 2012
Source: www.iclr.co.uk
Roberts v Gill & Co [2010] UKSC 22; [2010] WLR (D) 130
“A beneficiary under a will who had commenced proceedings against solicitors he alleged had acted negligently in connection with the estate could not, after the relevant limitation period had expired, amend his claim so as to also claim on behalf of the estate by way of a derivative action.”
WLR Daily, 21st May 2010
Source: www.lawreports.co.uk
Please note once a case has been fully reported in one of the ICLR series the corresponding WLR Daily summary is removed.
Roberts v Gill & Co (a Firm) and Another
Court of Appeal
“When the court gave permission for a personal claim, brought by a beneficiary of an estate in his personal capacity, to be continued as a derivative claim on behalf of the estate, the personal representative or administrator had to be joined as a party to those proceedings.”
The Times, 18th August 2008
Source: www.timesonline.co.uk
Please note the Times Law Reports are only available free on Times Online for 21 days from the date of publication.
Roberts v Gill & Co and another [2008] EWCA Civ 803; [2008] WLR (D) 239
“Where a beneficiary of an estate brought a derivative claim, the personal representative had to be joined as a party, since the situation was indistinguishable from that of a derivative action brought by a member of a company or corporate body, in which the company had to be joined as a defendant under CPR r 19.3.”
WLR Daily, 16th July 2008
Source: www.lawreports.co.uk
Please note once a case has been fully reported in one of the ICLR series the corresponding WLR Daily summary is removed.
Franbar Holdings Ltd v Patel and others [2008] EWHC 1534 (Ch); [2008] WLR (D) 220
“Where the question of ratification arose in the context of an application to continue a derivative claim, under s 261 of the Companies Act 2006, the court should ask itself whether the ratification had the effect that the claimant was being improperly prevented from bringing the claim on behalf of the company. That also applied where the connected person provisions in s 239 were not satisfied but there was still actual wrongdoer control by which there had been a diversion of assets to persons associated with the wrongdoer, albeit not connected in the sense provided by s 239(4).”
WLR Daily, 3rd July 2008
Source: www.lawreports.co.uk
Please note once a case has been fully reported in one of the ICLR series the corresponding WLR Daily summary is removed.
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