Experienced Toronto Litigators for Derivative Actions
Stakeholders can sometimes find themselves facing financial harm as the result of corporate activities, in many cases where company directors or officers are acting for personal gain. Where corporate representatives are unwilling, or unable, to take appropriate actions to remedy these harmful situations, a complainant can bring a derivative action on behalf of the corporation.
Financial Litigation is a commercial litigation boutique offering insightful, timely advice; we are available to assist our clients seven days a week. Focusing entirely on financial and commercial law, our lawyers regularly advise corporate shareholders and agents about their rights and the availability of derivative actions and other remedies.
What is the basis for a derivative action?
A derivative action enables individuals to bring a legal action on behalf of a corporation. It seeks damages for the wrongful conduct of majority shareholders, the company board of directors, and other agents of the corporation. Any remedy granted will be payable to the corporation itself, although in some cases there may be monies ordered payable to shareholders.
These actions are inherently very complex and require specialized legal advice. They may only be brought with leave (i.e. permission) of the court, and will be approved where:
- The directors of the corporation will not take appropriate legal action;
- The corporation has been given reasonable notice of the derivative action;
- The complainant is acting in good faith; and
- The derivative action appears the be in the best interests of the corporation.
When is it possible to advance a derivative action?
Where the wrongful conduct has resulted in harm being done to a public corporation, and all shareholders are impacted equally, a derivative action is appropriate.
If there is a personal element to the damages, the situation may give rise to an oppression remedy. This is a claim brought on behalf of an individual that has been uniquely harmed by the wrongful conduct of corporate directors, majority shareholders, or other agents.
Skilled, responsive legal advice for oppression claims
Derivative actions are difficult to pursue, and should only be handled by an experienced commercial litigator. Financial Litigation is a boutique law firm that exclusively handles financial, corporate, and related disputes, and offers business-minded advice when you need it. We answer our clients’ calls promptly and handle issues as soon as they arise. Contact us by calling 416-769-4107 x1, or online to schedule a consultation.