Bermuda Court Rules Amended To Require Leave To Bring Derivative Actions

From 9 July 2018, derivative actions commenced in Bermuda may not be continued without leave from the Supreme Court. Until now the right to pursue claims derivatively was governed exclusively by the common law, and in particular the various exceptions to the rule in Foss v Harbottle (1843) 2 Hare 461. The introduction of a formal requirement of judicial leave brings Bermuda into line with other common law jurisdictions such as the Cayman Islands and BVI, and should provide additional protection against frivolous or vexatious shareholder claims.

The requirement comes by way of amendments to the Rules of the Supreme Court 1985. A new Rule 12A has been added within Order 15, in terms which replicate an equivalent provision in the Cayman Islands’ Grand Court Rules 1995. Notable aspects of the new rule include: