Corporate loss and personal suits

Fletcher, Roland and Doherty, Michael (2000). Corporate loss and personal suits. Business Law Review, 21(12) pp. 279–281.


The Court of Appeal recently considered the complex case of Walker and Others v Stones and Others. This case examined the issue of legal personality and the consequences of this concept for the rights of shareholders and other natural persons who aspire to litigation. The case involved an examination of the rule in Foss v Harbottle which states that an individual shareholder is not competent to bring an action against the directors of a company, for misapplying company property, as the company is the correct person, in law, to commence such an action. It is clear from the decision of the Court of Appeal in the Walker case that this rule should be regarded as only a starting point and that a shareholder who is also a beneficiary under a discretionary trust may be allowed a legal action separate to that of the company.

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