Strong doubt cast on a shareholder’s entitlement to see a company’s privileged documents (Aabar Holdings S.A.R.L v Glencore plc)
Dispute Resolution analysis: The so-called ‘shareholder rule’ (‘the Rule’) is generally understood to mean that legal professional privilege cannot be maintained by a company in relation to documents of a privileged nature against one of its shareholders, except where the privileged documents were created for the purpose of hostile litigation involving the shareholder. In a detailed analysis of many authorities on this point, and of parties in apparently analogous relationships, Mr Justice Picken, sitting in the Commercial Court, has held that the Rule is unjustifiable and should no longer be applied. Its existence did not result from a shareholder having a proprietary interest in the assets of a company in which the shareholder held shares. Nor was the Rule underpinned by the notion of the company and its shareholders having a joint interest in the subject matter of the privileged documents. The concept of joint interest privilege as a freestanding or standalone species of privilege was not supported by case law and would be entirely dependent on the circumstances. Instead, it was ‘an umbrella term’ describing different situations where one party was unable to assert privilege against another party. Written by the LexisNexis Dispute Resolution team.