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Privilege: "shareholder rule" does not exist in English law

William Kanaan

Despite submissions that it had stood for 135 years and had been approved by both the Court of Appeal and Supreme Court, the High Court has held that the "shareholder rule", so-called because a company cannot assert privilege against its own shareholder, except in relation to documents that came into existence for the purpose of hostile litigation against that shareholder, does not exist in English law.


The Court found that the shareholder rule was unjustifiable and should no longer be applied.


There was no binding authority which decided that the shareholder rule could be justified on the basis of joint interest privilege. Furthermore, joint interest privilege as a freestanding species of privilege was not supported by the authorities.


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