Jurisdiction(s):
Ireland

Privy Council in Jardine abolishes Shareholder Rule: companies can assert legal professional privilege against shareholders in England and Wales, with corporate governance implications and an Irish rethink likely

Published on: 15 October 2025

Published by a LexisNexis Ireland - Corporate expert

Legal News

Article summary

Directors must advance the company’s best interests, while also adhering to legal requirements that dictate what must be revealed to shareholders and how their interests are considered in corporate decision-making. When decisions were taken with the benefit of legal advice, the ‘Shareholder Rule’ created uncertainty about who could access that advice in future disputes, in the absence of a statutory footing. On 24 July 2025, in Jardine Strategic Ltd v Oasis Investments II Master Fund Ltd No 2 [2025] UKPC 34 (Jardine), the Judicial Committee of the Privy Council issued a landmark judgment abolishing the ‘Shareholder Rule’. That rule had functioned as an exception to legal advice privilege, preventing a company from maintaining privilege over its legal advice vis-à-vis its shareholders in later litigation. Although the ‘Shareholder Rule’ had stood in England and Wales for more than 135 years, the Privy Council found no sound basis for it and held that a company is entitled to assert legal professional privilege against its shareholders, clarifying a long-standing area of confusion...

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