UK: England and Wales: the statutory derivative action

Part 11 of the Companies Act (2006) introduced a statutory derivative action (known in Scotland as derivative proceedings). The operation of the new regime has been considered by Mr Justice Lewison in Iesini & Others v Westrip Holdings Ltd. [2009] EWHC 2526 (Ch), a decision handed down last Friday. 

S. 261 provides that a shareholder bringing a derivative claim must apply to the court for permission to continue it. Under s. 263(2)(a), permission must be refused if the court is satisfied “that a person acting in accordance with section 172 [Companies Act (2006)](duty to promote the success of the company) would not seek to continue the claim”. Lewison J. held that s. 263(2)(a) would apply only where the court is satisfied that no director acting in accordance with s. 172 would seek to continue the claim.