Part 11 of the Companies Act (2006) placed on a statutory footing the right of a shareholder to instigate legal action on the company's behalf, known as a derivative action (in England and Wales) and derivative proceedings (in Scotland). A shareholder bringing a derivative action must, under Section 261, apply to the court for permission to continue it. Such permission was granted earlier this month by Mrs Justice Proudman in Kiani v Cooper (Ch.D., 4 February), in a case concerning alleged breaches of fiduciary duty by a company director. This is one of the first reported English decisions in which permission has been granted. It is available on the BAILII database here.Monday, 15 February 2010
UK: England and Wales: court grants permission for shareholder to continue derivative action
Part 11 of the Companies Act (2006) placed on a statutory footing the right of a shareholder to instigate legal action on the company's behalf, known as a derivative action (in England and Wales) and derivative proceedings (in Scotland). A shareholder bringing a derivative action must, under Section 261, apply to the court for permission to continue it. Such permission was granted earlier this month by Mrs Justice Proudman in Kiani v Cooper (Ch.D., 4 February), in a case concerning alleged breaches of fiduciary duty by a company director. This is one of the first reported English decisions in which permission has been granted. It is available on the BAILII database here.
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