- Court of Appeal clarifies ambit of the rule against reflective loss (Garcia v Marex)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
Dispute Resolution analysis: In a judgment that is likely to become the leading authority on the correct ambit of the rule against reflective loss, the Court of Appeal has provided some welcome clarification to this area of law. In particular, it has answered an important question which had remained unresolved for decades—does the rule against reflective loss which applies to shareholder creditors also extend to claims by non-shareholder unsecured creditors? The Court of Appeal held that it does, and also emphasised the very narrow scope of the Giles v Rhind exception to the rule against reflective loss. Richard Greenberg, barrister at 20 Essex Street Chambers, discusses the practical implications of the judgment for practitioners involved in claims on behalf of unsecured creditors.
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