A Plague on Both Your Houses

Before I move on - at least for now - from unfair prejudice, a few words about the Claimant.

The Court is very alive to the tactical nature of an Unfair Prejudice application: it is expensive for both parties, (and quite proper for the Claimant to require the respondent not to use company money to pay for the lawyers, and to undertake not to do so, or face an order in those terms). It is stressful, and usually paper-heavy. In short, it costs time and treasure.

So, the Claimant cannot properly object to the Court requiring him to be "squeaky clean”.

It he is not then the Court may find that the controller's behaviour which is prejudicial is not unfair, in the light of the bad behaviour of the Claimant; if the 2nd limb is not made out the claim fails.

Where the Claimant has participated - even if not directly - in the activity of which he later complains, the claim may well fail.

A Claimant who has voluntarily surrendered involvement in a company cannot claim unfair prejudice if he is later excluded from participation.

Finally, as I mentioned above all litigation is a form of tactical play: to impose pressure on your opponent, to achieve your end. But if the Court finds that the decision to issue or pursue a claim is for some collateral purpose (eg to drive directors out, or to reduce the company value, or to disrupt trading relationships) that is an abuse of process and the claim will fail.

As you would expect, in an article of this length, there cannot be a definitive statement of the law, and this article does not offer specific legal advice

Grahame is an Associate Solicitor in the Litigation Department at Clough & Willis Solicitors and offers specialist advice on all areas of litigation.

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