Litigation by Shareholders and Reflective Loss

Extract

Many of the details surrounding the circumstances when shareholders can sue are shrouded in obscurity, but it is clear that where a company and a shareholder have overlapping claims the shareholder cannot pursue its personal claim if its loss is merely reflective of the company’s loss. The scope and rationale of the rule barring shareholders from bringing personal actions to recover reflective loss were authoritatively restated by the House of Lords in Johnson v. Gore Wood & Co. [2001] 2 W.L.R. 72.