PRACTICE DIRECTION 19A – DERIVATIVE CLAIMS

This Practice Direction supplements CPR Part 19

Contents of this Practice Direction

TitleNumber
Application of this practice directionPara. 1
Early intervention by the companyPara. 2
Hearing of applications etc.Para. 3
Discontinuance of derivative claimPara. 4

Application of this practice direction

1 This practice direction applies to derivative claims and applications for permission to continue or take over such claims within the scope of rule 19.14(1)

Early intervention by the company

2 The decision whether the claimant’s evidence discloses a prima facie case will normally be made without submissions from or (in the case of an oral hearing to reconsider such a decision reached pursuant to rule 19.15(9)) attendance by the company. If without invitation from the court the company volunteers a submission or attendance, the company will not normally be allowed any costs of that submission or attendance.

(Sections 261, 262 and 264 of the Companies Act 2006 contain provisions about disclosing a prima facie case in applications to continue a derivative claim.)

Hearing of applications etc.

3 (1) Where a permission application to which this practice direction applies is made in the High Court it will be assigned to the Chancery Division and decided by a High Court judge.

(2) Where such an application is made in a county court it will be decided by a circuit judge.

Discontinuance of derivative claim

4 The order under rule 19.20 may be appropriate where any future proposal to discontinue or settle might not come to the attention of members who might have an interest in taking over the claim.