Reflective loss following Marex v Sevilleja
Where a wrong is caused to a company, do its shareholders also suffer a loss? Can a shareholder sue for his own loss, where it “reflects” the company’s loss? What if the company can’t or won’t sue? These thorny issues have led to much litigation for nearly 200 years. Reflective loss has now been given a major overhaul by the Supreme Court.
This podcast will cover:
- The rule in Foss v. Harbottle (barring a shareholder from bringing a claim for the company’s loss);
- The extension in Prudential v. Newman (a shareholder may not circumvent the rule by suing for his own loss if it reflects the company’s loss);
- The definitive restatement of the doctrine of reflective loss in Sevilleja v. Marex (Supreme Court, July 2020); and
- The similar rule in trust law.