Background
As addressed in our recent client alert The end of the “Shareholder Rule”?, Mr Justice Picken’s judgment declared that the Shareholder Rule, which historically allowed shareholders to access company documents protected by privilege (except for documents arising from litigation between the shareholder and the company), “should no longer be applied”. This decision was based on the conclusion that the rule was “unjustifiable” and did not align with modern company law principles.
Supreme Court decision
In our article Will the Supreme Court deliver the final blow to knock out the Shareholder Rule?, we reported that on 22 January 2025, Aabar sought to appeal directly to the Supreme Court under the leapfrog procedure. However, on 7 February 2025, the Supreme Court refused permission to appeal, thereby maintaining the status quo that the Shareholder Rule does not exist in English law.
Implications
The upcoming appeal in the Court of Appeal will be closely monitored, given its potential to reshape the landscape of shareholder rights and access to privileged company documents. The outcome could either reinforce the current stance or potentially revive aspects of the Shareholder Rule under a different legal rationale.
We will continue to provide updates as the case progresses.
Newsflash 2025-091