Friday 14 August 2015

UK: England and Wales: listed company shareholder's application for permission to continue derivative claim declined

A copy of the extemporary judgment of His Honour Judge Hodge QC (sitting as a judge of the High Court) in Bridge v Daley [2015] EWHC 2121 (Ch), which was delivered in June this year, was added to the BAILII database this week. The case concerned an application for permission to continue a derivative claim under Part 11 of the Companies Act 2006. Permission to continue was refused and the shareholder was ordered to pay the costs of litigation. Unusually, the claim was brought by a shareholder in a publicly listed company (Elektron Technology plc, with a listing on AIM). This fact, and the potential for minority shareholders to act in ways detrimental to the other shareholders, was noted by the judge (para. [80]):
"An extraordinary feature of the case is ... that the company in question is a public limited company, rather than a private company; but shareholders have to be protected from a minor minority individual shareholder seeking to pursue a claim on behalf of the company of which they are shareholders when they do not wish the company's assets to be applied for that purpose. That is the whole purpose of the derivative claim procedure".

Extraordinary is, perhaps, too strong a word to use: this is not the first decision concerning a derivative claim and a listed public company under Part 11 (see Mission Capital Plc v Sinclair [2008] EWHC 1339 (Ch)). Note too that, according to a market announcement by Elektron, the unsuccessful shareholder - Mr Bridge - has indicated that he will be appealing the decision: see here.

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