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Commentary

115 Statutory derivative action

COMPANIES vol 10(1) Directors and Other Officers, Shareholders, Shares and Share Capital
| Commentary

115 Statutory derivative action

| Commentary

115 Statutory derivative action

The Companies Act 2006 includes a statutory derivative action which the shareholder may use as an alternative to a personal action or a petition for unfair prejudice. The remedy is not intended to replace the rule in Foss v Harbottle1, but instead reflects the recommendation of the Law Commission that there should be a ‘new derivative procedure with more modern, flexible and accessible criteria for determining whether a shareholder can pursue an action’2.

The Act sets out a two-stage procedure for a shareholder to bring a derivative claim the main aim of which appears to be the

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