Supreme Court decision on reflective loss

In a unanimous decision, the Supreme Court held that an established rule of company law restricting third parties from suing persons alleged to have harmed a company in a manner that caused reflective loss should be followed and even narrowed to apply to situations involving shareholders claiming for diminutions in value.

The Supreme Court affirmed that the principle against reflective loss is “limited to claims by shareholders that, as a result of actionable loss suffered by their company, the value of their shares, or of the distributions they receive as shareholders, has been diminished. Other claims, whether by shareholders or anyone else, should be dealt with in the ordinary way”.

Sevilleja v Marex Financial Ltd [2020] UKSC 31