Welcome!

To all those reading this I am David Gibbs; I am a Lecturer in Company and Commercial Law at the University of Hertfordshire.

I created this blog as a general out-let of ideas for my research, as well as keeping those interested up-to-date on my research and general interests.

I completed my PhD thesis at the University of East Anglia in 2014. The thesis was recommended for the award of PhD with no corrections. My external examiner was Prof. Simon Deakin (Cambridge) and internal examiner was Prof. Morten Hviid.
My PhD research centred on directors' duties and company law. The thesis was titled 'Non-Executive Self-Interest: Fiduciary Duties and Corporate Governance'. It was a doctrinal and empirical study on whether self-interest was suitably controlled amongst non-executive directors.

My supervisors were Prof. Mathias Siems, Prof. Duncan Sheehan, Dr. Sara Connolly and Dr. Rob Heywood

All opinions of any existing or future blogpost are my own. They do not necessarily represent the views of any of my associated institutions.
ORCID 0000-0002-6596-8536


Friday, 14 September 2012

Some useful information on derivative claims

Case
Type of company
Costs indemnity sought
Financial State of the company
Shareholding % (respondent/claimant)
Amount Claimed for*
Concerned a conflict of interest?
Length of proceedings
Cinematic Finance
Ltd
N/A
Doubtful solvency
0/100
N/A
Yes
N/A
Fanmailuk
Ltd
N/A
Solvent
Majority/minority
£70,000,000
Yes
N/A
Franbar
Ltd
N/A
Solvent
75/25
N/A
Yes
N/A
Hughes
Ltd
Likely
To be dissolved
50/50
£100,000+
Yes
N/A
Iesini
Ltd
N/A
Doubtful solvency
Majority/minority
N/A
Yes
4 days
Kleanthous
Ltd
N/A
Solvent
84.5/15.5
£120,000,000
Yes
N/A
Kiani
Ltd
Yes
Solvent
50/50
£296,000
Yes
1 day
Mission Capital
Plc
N/A
Solvent
N/A
N/A
Yes
N/A
Parry
Ltd
N/A
No assets
50/50
£248,577.24
Yes
N/A
Phillips
Ltd
N/A
Solvent
50/50
N/A
Yes
N/A
Seven Holdings
Ltd
N/A
Effectively no assets
50/50
£1,693,212.32
No
1 day
Stainer
Ltd
Yes
Solvent
87/0.08
£7,000,000
Yes
N/A
Stimpson
Ltd by guarantee
N/A
No assets
Majority/minority
£5,300,000
Yes
N/A

Apologies that the table extends over the end. Formatting problems are preventing editing. The final two columns "concerned conflict of interest" are all yes except for Seven Holdings. Only 2 of the cases provided details on how long the permission hearing lasted.

As derivative claims continue to pass through staying on top of them is quite useful so as to determine how successful the procedure will be. How successful derivative claims are likely to be are demonstrated by two quotes. One from Siems and one from Reisberg: Siems has noted that the 'use of the derivative claim will depend on its relationship to the unfair prejudice remedy'.[1] Reisberg has also said that success of the statutory claim will not be judged by quantity 'but by whether the rules governing the circumstance in which such an action may be brought are made more comprehensible and accessible so that, in exceptional circumstances, the commencement of a derivative claim will be regarded as a remedy worth pursing'.[2]
So far the relationship with the unfair prejudice remedy seems to be complementary rather than preferable. Claims are successful despite the availability of another remedy. As well the rules seem accessible with no lengthy trials or issues of wrongdoer control or what conduct can be ratified taking up too much of the court's time. It certainly appears that the concern that what conduct can be ratified will maintain the need to establish wrongdoer control are unsubstantiated. There has been some slight confusion with the procedure though as some courts have tended to ignore the need to establish a prima facie case. Thus in some instances courts will rigorously follow procedure from the statute. In others they will simply only address points they deem as relevant. The latter may be cost and time saving but may reduce the certainty of procedure.
In total five of the thirteen claims have successfully survived the permission stage and have been granted permission to commence a derivative claim. All 13 have survived the ex parte application (prima facie case)


[1] M Siems, “Private Enforcement of Directors' Duties: Derivative Actions as a Global Phenomenon” UEA LAW WPS 2010-MS-1 at <http://ssrn.com/abstract=1699353>  accessed January 24, 2011
[2] A Reisberg, ‘Shadows of the Past and Back to the Future: Part 11 of the UK Companies Act (in)action’


* or rough estimate where figure not available

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