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K12.5. Derivative actions
| 403. | A straightforward and self-contained issue concerning derivative actions may also be addressed. |
| 403.1 | Before the Woolf reforms were enacted, there had been inserted into the RSC, Order 15 r 12A dealing with derivative actions. This made procedural provision for an action brought by a member of a company on behalf of the company for a wrong done to the company in circumstances where there has been a fraud on the minority or an abuse of power by the majority. (Note 349) |
| 403.2 | This has now been re-enacted (and extended to legal entities other than companies) by CPR 19.9. Recognizing that a shareholder may not have an indefeasible right to sue on the company's behalf, the procedure requires continuation of a derivative action to be subject to the court's permission. |
| 403.3 | The HCR do not contain any express treatment of derivative actions. Readers are asked whether a similar provision should be adopted in Hong Kong: Proposal 24. |
Notes
| 349 | See, eg, Estmanco (Kilner House) Ltd v GLC [1982] 1 WLR 2; Smith v Croft (No 2) [1988] Ch 114; Anglo-Eastern (1985) Ltd v Karl Knutz [1988] 1 HKLR 322. <back> |
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