Shareholder Rule abolished: Jardine more closely aligns shareholder inspection rights in the UK and UAE

Introduction

The English Privy Council's decision in Jardine Strategic Ltd v Oasis Investments II Master Fund Ltd [2025] UKPC 34 abolished the so-called "Shareholder Rule", confirming that a company may assert legal professional privilege (“LPP”) against its own shareholders. While the UAE reaches a similar practical outcome through a different legal framework, the decision increases alignment between the two jurisdictions on shareholder access to company legal advice — a development of particular relevance for multinational groups operating across both.

The decision in Jardine Strategic Ltd v Oasis Investments II Master Fund Ltd

Historically, English law recognised the possibility that shareholders could gain access to privileged company documents under the Shareholder Rule — a principle derived from older case law suggesting that a company could not assert LPP against its own shareholders. In Jardine, the Privy Council concluded that this principle lacked a sound juridical foundation and should no longer form part of English law. Privilege belongs to the company, which may assert it against shareholders in the same way as against any third party.

For a more detailed overview of the judgment in Jardine, please refer to our separate article on the same. 

What Jardine means for the Shareholder Rule in the UK

The most significant consequence of Jardine is the abolition of the Shareholder Rule. The default position is now clear: it is the company, not its shareholders, that holds the benefit of privilege over legal advice. A shareholder has no inherent entitlement to override that privilege by virtue of their shareholding alone. This places companies in a significantly stronger position when dealing with shareholder challenges, investigations, or litigation, with management able to seek and rely upon legal advice in confidence that LPP will be equally effective against shareholders as against third parties.

The litigation exception

Jardine does not operate without qualification, as the abolition of the Shareholder Rule does not extend to documents created for the purpose of litigation against the shareholders themselves. Where a company has sought legal advice specifically in anticipation of litigation against a particular shareholder, the privilege analysis requires more careful consideration. Practitioners should therefore distinguish between general legal advice obtained in the course of operations (now privileged against shareholders) and advice obtained in the context of actual or anticipated shareholder litigation.

Practical implications

In cases where the shareholders do not have any express contractual or constitutional right to review privileged documents, the practical implications of Jardine for companies operating under English law include the following.

• Board and management advice: Legal advice obtained by boards in relation to corporate transactions, regulatory matters, shareholder disputes, or governance decisions is now more robustly protected from shareholder scrutiny.
• Shareholder investigations and activism: Activist or minority shareholders seeking to challenge management decisions can no longer invoke the Shareholder Rule as a route to disclosure of the company's legal advice.
• Due diligence and disclosure: In the context of mergers, acquisitions, or other transactions, privilege will ordinarily prevail over any shareholder claim to inspect the company's legal advice.
• Regulatory and litigation strategy: Companies engaged in disputes with shareholders, whether in derivative claims, unfair prejudice petitions, or other proceedings, should consider whether the litigation exception may apply and take advice accordingly.
• Governance structuring: Boards and general counsel can engage with legal advisers more freely, knowing that those communications are protected and need not be tempered by concern that shareholders may later seek to compel their disclosure.

Where privilege is waived through contractual agreement or company constitution, it is unlikely that Jardine will make any significant difference to a company’s capacity to resist disclosure of privileged documents to its shareholders. On the contrary, the express litigation exception may operate to further reinforce a shareholder’s right to access certain documents. Companies therefore waive privilege at their own risk and should be aware that Jardine will not override existing agreements with or obligations owed to shareholders.

The position in the UAE

Onshore UAE

There is no recognised concept of LPP under onshore UAE law. Instead, the UAE imposes an obligation of professional confidentiality on lawyers, therefore making confidentiality a duty owed by the lawyer rather than a privilege the client may assert and waive. Shareholder access to company information is governed by the UAE Companies Law (Federal Decree Law No. 32 of 2021) as amended by Federal Decree Law No. 20 of 2025[1], which grants shareholders certain inspection rights over company records and financial statements but does not extend to legal advice obtained by the company. 

Additionally, through its Regulations as to Disclosure and Transparency (Authority Board of Directors’ Decision No. 3 of 2000) the UAE Capital Markets Authority (replacing the ESCA as of 1 January 2026) mandates certain disclosures by companies listed on securities markets in the UAE, including the Abu Dhabi Securities Exchange and Dubai Financial Market.  These disclosures include, among other things (i) company reports; (ii) yearly financial statements; (iii) details of transactions outside the UAE; and (iv) information on the purchase or sale of major assets. However, there is no mandated obligation to disclose confidential advice received from a company’s advisors. 

Therefore, subject to any pre-existing contractual arrangements and the terms of the company’s constitution, the company retains discretion over what legal communications, if any, are shared with shareholders.

DIFC and ADGM

Both the DIFC and ADGM recognise LPP as part of their applicable law. The DIFC Courts apply DIFC law, which draws heavily on English law principles, and LPP is recognised within the DIFC's procedural and evidentiary framework. Similarly, the ADGM directly applies English common law and LPP is thus recognised and applied in both jurisdictions.

However, neither the DIFC nor ADGM courts have yet considered whether any analogue to the Shareholder Rule would apply in their respective jurisdictions. Following Jardine, any such argument is likely to face significant difficulty, given the persuasive influence of English court authority in both jurisdictions.

Has Jardine aligned the UK and UAE?

Areas of functional convergence

Despite their different doctrinal foundations, the UK and UAE positions following Jardine now share a number of functionally significant characteristics.

• Rejection of an inherent shareholder claim to legal advice: Both jurisdictions reject the idea that shareholders have any inherent claim to inspect legal advice held by the company. In the UK, this follows from the abolition of the Shareholder Rule. In the onshore UAE, it follows from the absence of any statutory right of access to legal communications under the Companies Law and CMA Regulations as to Disclosure and Transparency
• The company as the sole controller of confidentiality or privilege: In both jurisdictions, the company is treated as the holder of any applicable confidentiality or privilege rights in respect of its legal communications, and shareholders have no ability to override that position, save for where they have an express right to the information through a contract or the constitution of the company.
• Prioritising certainty for corporate decision-making: Both systems support a framework in which management can seek legal advice with a reasonable expectation that such communications will not be accessible to shareholders.

In this sense, Jardine has brought the English law position into functional alignment with the UAE approach, even though the routes by which each jurisdiction arrived at this outcome differ considerably.

Conceptual distinctions

Notwithstanding the above convergence, the conceptual foundations of the two regimes remain distinct.

• UK — legal advice privilege as a substantive right: In England and Wales, LPP is a substantive legal right, fundamental to the administration of justice. It is held by the client, who may assert or waive it. Jardine strengthens that right, confirming it operates fully in favour of the corporate client as against all persons, including shareholders.

• UAE (onshore) — confidentiality as a professional obligation: In the onshore UAE, confidentiality operates as a duty owed by the lawyer to the client, rather than a client-side right. The practical result may be similar to LPP, but the legal mechanism and available remedies differ materially.

   

Distinct disclosure regimes and evidential rules

The disclosure regimes and evidential rules applicable in the UK and UAE also remain distinct, with direct implications for cross-border disputes and multinational groups.

• In English litigation, a company will be required to give disclosure of relevant documents, and the question of whether a document is privileged will be resolved by reference to the well-developed body of English privilege law, including the position post-Jardine.
• In onshore UAE litigation, no equivalent disclosure process exists and the absence of LPP means that the starting point, and the applicable exceptions and protections, are fundamentally different.
• In DIFC and ADGM proceedings, where LPP is recognised, the English framework is likely to be applied by analogy and, following Jardine, a shareholder seeking to access company legal advice is likely to find its position weakened.

The risk analysis in any cross-border dispute involving UK and UAE elements therefore remains jurisdiction-specific and cannot be assumed to be homogenous simply because the high-level outcomes are now functionally similar.

Conclusion

Jardine is a landmark decision in English privilege law. By abolishing the Shareholder Rule, the Privy Council has confirmed that LPP operates fully in favour of the corporate client as against shareholders, subject to careful consideration of documents created in connection with shareholder litigation. The decision brings the UK into functional alignment with the UAE, where the company similarly controls access to its legal communications. For multinational groups, this convergence provides greater conceptual coherence across both jurisdictions. Nevertheless, careful jurisdiction-specific advice remains essential: the conceptual foundations of privilege in the UK and confidentiality in the onshore UAE differ, the procedural rules diverge significantly, and the DIFC and ADGM have not yet produced jurisprudence on shareholder-specific issues.

In practical terms, Jardine has brought the UK closer to the UAE position: both systems now operate on the premise that the company is the proper controller of its legal communications, and that shareholders have no inherent claim to such communications by virtue of their membership alone.