Background
A derivative action is an action brought by a shareholder on
behalf of the company. Owing to the complexity of the previous law,
very few derivative actions succeeded. When the Companies Act 2006
(2006 Act) came into force, it introduced a wider
range of circumstances in which such actions could be brought. A
derivative action is now expressly available for a breach of duty
by a director, even if the director has not benefited personally
from the breach. Furthermore, it is no longer necessary for the
shareholder to show that the director(s) who carried out the
wrongdoing control the majority of the company's shares.
Initially, some legal commentators were concerned that activist
shareholders would bring such actions simply to disrupt the affairs
of the company or make life difficult for its directors. I
initially considered some of the early cases on this new derivative
action in January 2010 and concluded that any concerns that
activist shareholders
