Shadows of the Past and Back to the Future : Part 11 of the UK Companies Act 2006 (In)Action

The purpose of this article is primarily to look into the early demonstration of the new statutory procedure relating to derivative claims under Part 11 of the Companies Act 2006 in two recent cases, and subsequently to assess the likely impact of these cases on the future development of the law. The article is organized as follows. Section II briefly outlines the scope and the procedural framework for the application for leave of the new statutory derivative claim under Part 11 of the 2006 Act. Drawing on recent experience in foreign jurisdictions and recent case law, it also highlights what the author believe should have been also included in Part 11, but is not there at the moment (i.e. multiple derivative claims). Section III looks into an early demonstration of the new statutory procedure in practice in two recent cases, namely, Franbar Holdings Ltd v Patel and others and Mission Capital plc v Sinclair. Section III then discusses the lessons that can be drawn from these two cases. It also assesses the likely impact of these cases on the future development of the law. Section IV proposes a new model for derivative claims. Finally, Section V draws some conclusions