Shareholder Claims

Shareholder Claims
Editor: David Greene
Publisher: Jordans
ISBN: 9781846612961            
Price: £110 /eBook £99 + VAT

That it took investors a matter of days to bring proceedings arising out of the Facebook floatation in May this year highlights what a precarious time it is for those seeking to raise capital.

In England protest votes against excessive executive remuneration - the so-called “shareholder spring” -  have led to the departure of chief executives from a number of household names including Aviva and Trinity Mirror and caused discomfort to a number of other directors.

Shareholder Claims comes at an interesting time for investors, companies and their respective advisers. 

The book is aimed at both lawyers and investors/company representatives and strikes the right balance between technical detail and broad brush introductions. 

Each chapter deals with a different jurisdiction.  Many of them would be expected in a book such as this. 

The United States, Australia, England and Wales and the major off-shore centres such as Guernsey, the Isle of Man and the main Caribbean islands will be familiar to those practising in this field. 

Less obvious jurisdictions, such as Sweden and Austria, are also covered with the result that the book covers the major commercial centres in the Western world.

Each chapter covers the normal range of claims brought by shareholders both under statute and, where applicable, common-law. Potential claims arising out of formal prospectuses and offering documentation are summarised and form a useful introduction to what can be a complex and heavily regulated area.

In particular, the chapter on France deals in some detail with the relevant European directives which will be of interest across Europe and not only in France.

Claims arising out of “secondary communications” to the market are also dealt with, as are the possibility of claims against advisers, other third parties and insider trading claims. There is also an explanation of the derivative claims procedure in relevant jurisdictions, where shareholders seek to bring claims in the name of the company. 

In England alone, that topic has justified a book in its own right, but this short summary is a helpful guide to those investigating possible claims.

The chapter on the United States also sets out some of the common defences to investor claims, and this is a worthwhile addition which highlights where the contentious areas are likely to be.

A strength of a book of this nature is that it brings out the difference in approach between different jurisdictions very clearly.  An English lawyer might be surprised to learn that in Sweden a shareholder can only bring a claim against a company officer personally only where a crime has been committed, for example. 

Shareholder Claims will therefore make particularly interesting reading for those investors with the luxury of a choice of jurisdictions in which to bring claims.

Central to those investors’ concerns will no doubt be the different rules on costs and procedure and particularly whether class-actions are available.  Each chapter contains a brief summary of the Court system in that jurisdiction which again forms a basic introduction – but no more – to the different litigation procedures.

When dealing with potential claims in foreign jurisdictions, it is often hard to know where to start. While a good professional adviser should identify the issues and the best course of action, Shareholder Claims will point its readers in the right direction.

Jason Woodland is an associate at Peters & Peters