Judgment Junction | Shareholders lose their right of access to a company's legal advice

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In this episode of Judgment Junction, Litigation Partner Jane Standage and Senior Associate Olivia de Pont, discuss the Privy Council's recent decision in Jardine Strategic Holdings Ltd v Oasis Investments II Master Fund Ltd No 2 [2025] UKPC 34. This landmark ruling confirms that shareholders do not have the right to access a company's privileged legal advice. 

The discussion covers the historical context of the "shareholder rule," its criticisms, and the implications of this decision for company directors and shareholders, particularly in the context of increasing shareholder litigation and ESG-related actions.

[00:14]: Jane and Olivia set the stage for discussing the Privy Council's decision in Jardine Strategic Holdings Ltd v Oasis Investments II Master Fund Ltd No 2 [2025] UKPC 34

[00:53]: Olivia explains the historic "shareholder rule," which allowed shareholders to access their company's legal advice unless it related to hostile litigation against them. Olivia outlines the two essential ideas that the rule is based on:

1. Shareholders indirectly paid for the company's legal advice.
2. The analogy between the company-shareholder relationship and the trustee-beneficiary relationship.

[01:47]: Olivia discusses the increasing criticism of the rule, noting the imperfect analogy with trusts since companies have their own legal personality.

[02:02]: Jane and Olivia discuss the Privy Council's rejection of the "shareholder rule," aligning with the English High Court's stance in Aabar Holdings SARL v Glencore PLC [2024] EWHC 3046. Shareholders do not have the right to access a company's privileged legal advice.

[02:47]: The discussion moves to the implications of this decision for company directors, especially in the context of increasing shareholder litigation. They highlight the growing trend of shareholders buying shares to bring actions against companies, particularly in the ESG space, as seen in the ClientEarth v Shell plc [2023]. 

[03:17]: Jane and Olivia discuss the rise of shareholder class actions, with examples from Australia, including proceedings against Mineral Resources, Medibank Private Limited, Fleet Partners, Blue Sky Alternative Investments, and FNZ.

[04:17]: Jane and Olivia explain that the Privy Council's decision will help protect the sanctity of privilege in companies' legal advice, providing a tool for directors to fend off demands for access to privileged material. They note the potential impact on New Zealand courts in the coming years.

 

Information in this episode is accurate as at the date of recording Wednesday, 6 August 2025.

Please contact Jane Standage or Olivia de Pont or our Litigation team if you need legal advice and guidance on any of the topics discussed in the episode.

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