The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:
This Practice Note considers the scope of the reflective loss rule. It addresses the background to and implications of the rule against reflective loss with reference to the key decisions responsible for its development, including Prudential Assurance v Newman Industries, Johnson v Gore Wood, Giles v Rhind and Marex v Sevilleja. It also sets out a number of practical issues concerning the rule which it is sensible to have in mind in the event that you are acting for a shareholder and/or are involved in a claim where the rule might be relevant.
For further details on key and/or illustrative cases concerning the rule against reflective loss, see Practice Note: Reflective loss—key and illustrative decisions.
The rule has its origins in the principle derived by the case Foss v Harbottle, ie where an actionable wrong has been done to a company, the company is the proper claimant to recover any loss resulting from such wrong. In other words, where a breach of duty owed to a company causes it loss, only the company may sue in respect of that loss.
The principle that reflective loss is not recoverable was first explicitly expressed in Prudential. In Marex, Lord Reed concluded that Prudential had effectively laid down a rule of company law that diminution in the value of a shareholding or in distributions
**Trials are provided to all LexisPSL and LexisLibrary content, excluding Practice Compliance, Practice Management and Risk and Compliance, subscription packages are tailored to your specific needs. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial.
To view the latest version of this document and thousands of others like it, sign-in to LexisPSL or register for a free trial.
Existing user? Sign-in
Take a free trial
Brexit: The UK's departure from the EU on exit day ie Friday 31 January 2020 has implications for practitioners dealing with provisions in the CPR relevant to cross border matters, including CPR 5.4C (discussed below). For guidance on the impact of Brexit on the CPR, see Cross border
This Practice Note provides guidance on the interpretation and application of the relevant provisions of the CPR. Depending on the court in which your matter is proceeding, you may also need to be mindful of additional provisions—see further below.You should also consider if the proceedings will be
This Practice Note examines:•why negative pledge clauses are used in commercial transactions •the consequences of breaching negative pledge provisions•how negative pledges are viewed in the context of security and quasi-security, and•key considerations when drafting a negative pledge clauseWhere
What is the slip rule?The slip rule is a process by which the court may correct an accidental slip or omission in a judgment or order (see: CPR 40.12 and CPR PD 40B, paras 4.1 and 4.5).This rule only covers genuine slips or omissions in the wording of a sealed court order or handed down judgment
0330 161 1234
To view our latest legal guidance content,sign-in to Lexis®PSL or register for a free trial.