Legal Guide to Derivative Claims
Shareholder Derivative Claims
WHAT IS A DERIVATIVE CLAIM?
It is an established legal premise that the proper claimant for wrongs done to a company, whether by its directors or by third parties, is the company itself (Foss v Harbottle (1843) 2 Hare 461).
Therefore, as the ability to decide whether to sue or not in respect of those wrongs is generally vested in the board of directors, shareholders are normally prevented from complaining about actions that are approved by a director majority.
This Legal Guide sets out an extremely powerful option available to shareholders to redress that balance.