Shareholder Rule Implications

Further to my colleague Luke Hackett's post reporting that "The Shareholder Rule, a doctrine which had precluded companies from asserting Legal Professional Privilege against their shareholders, is no more" it is important to consider the implications that the Privy Council's decision has on directors and shareholders alike given this principle, rightly or wrongly, has stood in English law since the late 19^th century.

Impact on Companies:

• Directors and boards can seek legal advice candidly and confidentially, removing fears of automatic shareholder scrutiny as they can now assert legal professional privilege in litigation against shareholders, protecting confidential legal advice from disclosure.