High Court finds companies can assert privilege against their shareholders

The High Court has held that the so-called Shareholder Rule – ie that a company cannot assert privilege against its shareholders save in relation to documents created for litigation against that shareholder – does not exist in English law, and therefore the claimant shareholders have no right to disclosure of the defendant company's privileged documents: Aabar Holdings SARL v Glencore Plc [2024] EWHC 3046 (Comm).

This contrasts with the High Court's decision last year in Various Claimants v G4S Plc [2023] EWHC 2863 (Ch) (considered here), in which Mr Justice Michael Green expressed doubts as to the justification for the Shareholder Rule but considered that only a higher court could find it did not exist or should be got rid of. The judge in the present case (Mr Justice Picken) disagreed, finding that the Shareholder Rule is unjustifiable and should no longer be applied.

The decision is highly significant in the context of securities class actions, where it was previously thought that the Shareholder Rule would mean at least some shareholder claimants would, in principle, be entitled to disclosure of the defendant company's privileged documents – though the precise boundaries of the rule were unclear and the court could refuse disclosure on case management grounds (as it did in G4S). The present decision finds that there is in fact no such entitlement.

Interestingly, however, if the Shareholder Rule did exist, Picken J would have held that it was not an absolute rule but would depend on whether there was a genuine joint interest in the circumstances of each individual case. He would also have held that the rule was not limited to registered shareholders (contrary to the judge's view in G4S). In agreement with the judge in that case, however, he would have held that the principle applied to those who were shareholders when the relevant documents were created, regardless of whether they later disposed of their shares, but that it did not extend to without prejudice privilege.

It remains to be seen whether the claimants will seek to appeal the ruling. However, given the significance of the issue, it seems likely that this will not be the last word.

For more information, please see our Litigation blog post.

Note: In January 2025, the High Court granted a leapfrog certificate in this case so that the claimants could apply for permission to appeal directly to the Supreme Court. But in February 2025, the Supreme Court refused permission for that appeal on the basis that any appeal should be brought before the Court of Appeal in the usual way. In June 2025, the Court of Appeal allowed the claimant's application for permission to appeal. The Court of Appeal hearing was floated for 27/28 January 2026, but has been vacated - no doubt as a result of the Privy Council's decision in Jardine Strategic Limited v Oasis Investments II Master Fund Ltd [2025] UKPC 34 (considered here) which abrogated the Shareholder Rule under English law and is binding on the Court of Appeal.