The shareholder principle: ripe for change?

• Considers the recent case of Various claimants v G4S, in which the High Court examines the rule that a company cannot assert privilege against its shareholders, save where the advice concerns contemplated proceedings between the company and its shareholders.
• The judge considered that this disclosure right is based on a ‘shaky’ legal foundation and should not be extended. The rule is therefore limited to direct registered shareholders.

In the recent case of Various claimants v G4S [2023] EWHC 2863 (Ch), Mr Justice Michael Green considered the principle that a company cannot assert privilege against its shareholders, except where the documents came into existence in contemplation of proceedings between the company and its shareholders (the shareholder principle). Given the recent rise of shareholder activism, and of shareholder claims more generally, the shareholder principle is of considerable practical importance, particularly as shareholders generally only have very limited rights