Derivative Actions

The powerful but infrequently-used remedy known as the "derivative action" permits a shareholder or other complainant to advance an action on behalf of the corporation when the corporation refuses to bring the action itself.

Unlike oppression proceedings, a complainant brings a derivative action in the name of or on behalf of the company to enforce a right, duty or obligation enforceable by the company.

The derivative action is often used to enable a shareholder or other complainant to circumvent corporate management that will not take action to rectify a wrong where it may have been involved in or responsible for the wrong suffered by the corporation. However, the remedy is not limited to claims against other shareholders or management.