Loughrey, Joan --- "Introduction" [2012] ELECD 1301; in Loughrey, Joan (ed), "Directors’ Duties and Shareholder Litigation in the Wake of the Financial Crisis" (Edward Elgar Publishing, 2012) 1

Book Title: Directors’ Duties and Shareholder Litigation in the Wake of the Financial Crisis

Editor(s): Loughrey, Joan

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9780857939654

Section Title: Introduction

Author(s): Loughrey, Joan

Number of pages: 11

Extract:

Introduction
Joan Loughrey

This book brings together contributions from both academics and prac-
titioners assessing the operation and efficacy of directors' duties and
shareholder litigation in the wake of the financial crisis and its aftermath.
It is striking that no significant litigation has yet emerged against the
directors of banks and financial institutions for breaching their duties,
despite the disastrous management that was uncovered by the crisis.
What could be the reason for this? Does it reveal inadequacies in the law
on directors' duties and shareholder litigation? During the period up to
and after the start of the financial crisis, the duties of directors, and the
right of shareholders to take action on the company's behalf against
directors for breach of their duties was governed by the common law. If
that was deficient then does the Companies Act 2006, which replaced the
common law with codified directors' duties and a new statutory deriva-
tive action, address those deficiencies? Given that sufficient time has
elapsed since the commencement of the crisis for shareholder litigation to
emerge, and given that enough is now known about the crisis in the UK
from various public reports, it seems timely to assess directors' duties
and shareholder litigation with these questions in mind. This is what the
contributions in this collection set out to do.
The story of the global financial crisis is well-known. The first signs of
trouble emerged in the US sub-prime markets but by early 2007 in the
UK the ...