The Privy Council follows English High Court in conclusively disposing of the 'Shareholder Rule' in legal privilege

Earlier this year, in the High Court ruling in Aabar Holdings SARL v Glencore PLC & Ors [2024], Mr Justice Picken ruled that the "Shareholder Rule", which granted shareholders automatic rights to disclosure of a company's privileged documents, does not in fact exist in English law. This overturned 130 years of precedent and significantly reduced the scope of documents that shareholders can seek from companies in litigation.

That decision was subject to an appeal,  set to be heard by the Court of Appeal by 26 January 2026. The UK Supreme Court had declined a leap-frog on the basis that the same issue was about to be resolved either way by the Privy Council. Now, the Judicial Committee of the Privy Council (the final court of appeal for the UK overseas territories and some commonwealth countries) has done just that.

Jardine v Oasis judgment

The Judicial Committee handed down a judgment in Jardine Strategic Holdings Ltd and another v Oasis Investments II Master Fund Ltd and 80 others No 2 [2025] (a matter on appeal from the Court of Appeal in Bermuda) in late July 2025, ruling definitively that the Shareholder Rule must be abandoned. The Privy Council supported Mr Justice Picken's finding that the original proprietary justification for the rule was inconsistent with the proper analysis of a registered company as a separate legal entity from its shareholders.

The Judicial Committee also rejected the argument that the company-shareholder relationship could be said to attract joint interest privilege, noting that shareholders often have divergent interests and that the relationship between a company and its shareholders is essentially contractual, typically restricting shareholders' access to company documents and allowing companies to seek legal advice in confidence.

Conclusively, the Privy Council noted that the "status-based automatic Shareholder Rule is therefore now, and in truth has always been, a rule without justification. Like the emperor wearing no clothes in the folktale, it is time to recognise and declare that the Rule is altogether unclothed."

Handing down the judgment, the Privy Council issued a Willers v Joyce direction, instructing the courts in England and Wales to treat the decision as binding precedent within the jurisdiction.

Osborne Clarke comment

This judgment provides the final nail in the coffin of the Shareholder Rule. There is certainty at the highest level that this legal tenet can no longer be used to pursue opportunistic disclosure applications or leave the board concerned about the confidentiality of its legal advice.

Directors and lawyers alike will need to be sure that they have done what they need to ensure privilege attaches to advice sought and given – whether in the context of business as usual, litigation or investigations. The determined litigant is going to have to try harder to cast doubt.