Unfair Prejudice Research Articles

A Comparative Analysis of Remedies and Challenges in the Protection of Stakeholders Rights: OHADA vs. English Corporate Law

This article provides a comparative analysis of the remedies and challenges in the protection of stakeholder rights under OHADA (Organization for the Harmonization of Business Law in Africa) and English corporate law. The study focuses on key legal remedies available to stakeholders, including the derivative action model, the unfair prejudice remedy, personal right of action, remedies for breach of contract and torts, representative actions amongst other remedies. Under OHADA, the uniform legal framework aims to harmonize business laws across member states, promoting legal certainty and economic growth. In this context, the derivative action model allows minority shareholders to seek redress for wrongs committed against the company, while the unfair prejudice remedy protects stakeholders from actions that harm their interests. Personal right of action and remedies for breach of contract and torts provide additional avenues for stakeholders to seek justice. Representative actions further enable collective redress for affected parties. In contrast, English corporate law, rooted in a common law tradition, offers flexibility and judicial interpretation in protecting stakeholder rights. The derivative action model in English law allows shareholders to bring claims on behalf of the company, while the unfair prejudice remedy addresses situations where minority shareholders are treated unfairly. Personal right of action and remedies for breach of contract and torts are well-established, providing robust protection for stakeholders. Representative actions in English law facilitate collective litigation, enhancing access to justice. In tandem with the foregoing, this paper explores challenges in the practical enforcement of these remedies, including differences in legal culture, enforcement mechanisms, and jurisdictional issues. By comparing OHADA and English corporate law, the study provides insights into the effectiveness of various legal frameworks in protecting stakeholder rights and offers recommendations for enhancing stakeholder protection through legal reforms and policy initiatives. Through a content analysis of primary and secondary data, we uphold that this article contributes to the discourse on corporate governance and stakeholder theory, offering valuable perspectives for policymakers, legal practitioners, and scholars interested in the protection of stakeholder rights in diverse legal environments.

Limitation Period Applicable to Unfair Prejudice Petitions

Limitation Period Applicable to Unfair Prejudice Petitions

An institutional analysis of UK ostensible minority shareholder protection mechanisms

ABSTRACT This article argues that there is a conundrum at the heart of the company law understanding of ostensible minority protection mechanisms (the derivative claim and unfair prejudice): they are terrible at protecting those that they are thought to protect. The hurdles to access the remedies are too high, there is undue focus on the behaviour of the wronged party, costs are uncertain, and relief inadequate. This conundrum can be resolved by applying an institutional analysis and exploring the rules from the perspective of the company. Here, a number apparent weaknesses in the regime are mostly strengths for the company. The remedies are important for the company as they act as a ‘lightning rod’: all complaints by disgruntled shareholders are funnelled through these hegemonic argumentation structures, which protect the institutional arrangement of the company and, in turn, that part of the institutional environment which is company law.

A New Social Corporate Purpose: Stakeholders, Legitimate Expectations and Unfair Prejudice

A New Social Corporate Purpose: Stakeholders, Legitimate Expectations and Unfair Prejudice

The Arbitrability of Corporate Disputes After Fulham Football Club V. Richards: A Decade On

In Fulham Football Club (1987) Ltd v. Richards and The Football Association Premier League Ltd, the Court of Appeal of England and Wales settled a controversial matter, finding that unfair prejudice petitions under section 994 of the English Arbitration Act 1996 could be referred to arbitration. At the time the judgment was handed down, it was met with some scepticism with commentators arguing that it would lead to inconsistency and confusion in the arbitrability of disputes and the remedies that can be awarded in arbitration. In the years that followed, the Court of Appeal’s judgment has been relied on in the development of the arbitrability of corporate disputes in England and Wales and several other common law jurisdictions. On the occasion of the ten-year anniversary of the Fulham decision, this article explores whether the confusion and inconsistency that commentators predicted have, in fact, materialized. Arbitrability, Arbitration Act 1996, Corporate disputes, Fulham Football Club v. Richards, Remedies, Section 994, Unfair prejudice

Simply Unconvincing: The High Court on Probative Value and Reliability in the Uniform Evidence Law

Exclusion of evidence when its probative value is exceeded by its risk of creating unfair prejudice has long been a fundamental safeguard against unfair trials and wrongful convictions. In 2016, IMM v The Queen (IMM) curtailed that safeguard by holding that trial judges should assess probative value on the assumption that the evidence is reliable and credible. The IMM majority placed emphasis on the capacity of the evidence. In doing so, it provided a mysterious qualification: some evidence may lack probative value not because it is unreliable, but because it is ‘simply unconvincing’. The majority illustrated unconvincingness with the example of an unreliable eyewitness identification. Courts and legal scholars criticised the majority judgment for its harmful implications and for its apparent incoherence. From a review of almost 4 years of post- IMM jurisprudence and deeper exploration into one particular case, we find that ‘simply unconvincing’ has accentuated the confusion and inconsistency in Australian evidence jurisprudence.

Shareholder withdrawal in close corporations: an Anglo-German comparative analysis

ABSTRACT Small and medium enterprises (SMEs) are important to most economies, but the laws of close corporation entities used by SMEs are underrepresented in comparative corporate law scholarship. This Article critically analyses ‘withdrawal’ regimes in Germany's GmbH (Austritt aus wichtigem Grund) and the UK's private company limited by shares (unfair prejudice remedy) that respond to shareholder conflicts in close corporations. Comparative analysis reveals how the two jurisdictions differ in treatment of ‘non-fault’ scenarios and their underlying visions of shareholder protection. Potential reform of the UK's withdrawal regime based on German and Singapore law is also explored.

Doctrine of Just and Equitable Winding Up as Minority Shareholders’ Remedy in Pakistan

This article examines the doctrine of just and equitable winding as a minority shareholders' remedy in Pakistan. This is a residual remedy and developed with the passage of time for the protection of minority shareholders in the UK. The courts in the UK have established different views regarding circumstances in which remedy may be sought. In some cases, the court held that the jurisdiction of winding up is not different from unfair prejudice. Therefore, this article will further discuss the possibility of seeking remedy viz a viz other minority shareholders’ protection mechanism such as remedy against unfair prejudice.This article is based on qualitative research. The doctrinal and comparative research methods have been applied in the research. This article concludes that the remedy of winding up on just and equitable grounds may be effective only when the grounds for seeking remedy are wider than the unfair prejudice remedy

MARINA DISTRICT DEVELOPMENT COMPANY LLC., DOING BUSINESS AS BORGATA HOTEL CASINO & SPA V. AC OCEAN WALK LLC, DOING BUSINESS AS OCEAN CASINO RESORT

MARINA DISTRICT DEVELOPMENT COMPANY LLC., DOING BUSINESS AS BORGATA HOTEL CASINO & SPA V. AC OCEAN WALK LLC, DOING BUSINESS AS OCEAN CASINO RESORT

The Law of Evidence: Introduction and First Three Chapters

This post includes the Table of Contents, Introduction, and first three Chapters -- (1) Stipulations and Judicial Notice (2) Relevance (3) Unfair Prejudice -- of an innovative, new, low-cost Evidence casebook intended for use in American law schools.

Impact of the COVID-19 Outbreak on Minority Shareholder Protection

The COVID-19 outbreak, which was announced by the World Health Organization (WHO) as a global outbreak on 11 March 2020, comprises a risk not only for human health, but also for the whole world including society, business and the global economy. During lockdowns caused by the COVID-19 virus, the general atmosphere of companies changed. The significant restrictions and measures announced by the countries in order to deal with the COVID-19 crisis had serious economic outcomes for companies. The crisis environment has been used by some managers, who are also majority shareholders in the company or influenced by majority shareholders, for their own interests to oppress minority shareholders and to remove them from the company and management. Protection of shareholders matters for the facility of companies to raise the capital required to grow, innovate, diversify and compete. Thus, in these difficult COVID-19 times, it is more important to provide protection for minority shareholders. That will develop the level of confidence, trust and finally the levels of investment, which would result in a healthy and robust countries’ economy. Based on that, this article uniquely contributes to minority shareholder protection during the COVID-19 outbreak by focusing on corporate governance and also primary remedies that may be obtained by shareholders during the current pandemic. COVID-19 outbreak, Corporate governance, Minority shareholder protection, Derivative action, Unfair prejudice petition

Unfair prejudice in United Kingdom Company Law

It is common that the majority shareholders in a corporation take action that unfairly prejudices the minority. A majority shareholder occupies a dominant position in the decision-making process of the company's affairs and can control the company with the principle of majority rule. In the process of company development, the interests of the majority shareholders may diverge from the interests of the company. In this case, the majority of shareholders may engage in unfair prejudice conduct that harm the interests of the company and minority shareholders for their own benefit. Consequently, to some extent, the principle of majority rule provides the possibility for the controlling shareholders to abuse voting rights, which often constitutes damage to the interests of minority shareholders. In addition, due to the reliance on the controlling shareholder, the directors tend to only take into account the interests of the majority shareholders, with the result that ignore the rights and interests of non-controlling shareholders. Especially in private companies, minority shareholders not only cannot sell their shares in the stock exchanges without restrictions to exit the company, but also may be subject to more severe oppression by the actual controller of the company. When minority shareholders cannot obtain relief within the company, it is necessary for aggrieved shareholders to bring an action against the majority shareholders to protect their rights.
 
 However, under the rule in Foss v Harbottle, shareholders only be allowed to sue if they meet the exceptions. Due to the limited application scope of these exceptions, the aggrieved shareholders are often unable to get timely and effective relief in practice. In response to this problem, statutory unfair prejudice provisions are introduced to balance the interests of majority shareholders and minority shareholders, and to prevent shareholder oppression in corporate governance. It emphasizes judicial intervention to protect the legitimate interests of shareholders. Compared with just and equitable winding up and derivative action, the unfair prejudice is regarded as a mechanism for minority protection as it covers a variety of remedies and leaves the court with greater discretion.

Buyouts of minority shares after a successful unfair prejudice petition.

This article focuses on the determination of the price to be paid to the minority shareholders in cases where the courts order the majority shareholders of a company to buy out the minority shares under section 996(2)(e) Companies Act 2006, as a relief of a minority shareholder’s successful unfair prejudice petition under section 994 Companies Act 2006. Under the current law, the minority shareholders receive a fair value of their shares in the event of a buyout under section 996(2)(e) Companies Act 2006. However, it is unclear and controversial what constitutes a fair value, and various unsettled valuation issues occur. Hence, this article proposes a well-thought-out new system for the courts to follow when determining the price to be paid to the minority under section 996(2)(e) Companies Act 2006. Under the new proposed system, the price to be paid to the minority shareholders will be equal to their shares’ hypothetical fair market value to be assessed on the date of the buyout order and under a distinct procedure, the court may award the minority shareholders compensation. It is worth mentioning that this research provides a vital contribution to the existing literature with its analysis and its findings, considering that the valuation of minority shares is a relatively unexplored area. This is due to the fact that the vast majority of researchers are reluctant to conduct such a research, as they believe that the assessment of shares is a ‘technical- calculation, best left to accountants and investment-bankers’, ignoring that ‘the main- framework of share valuation’ is an important legal matter.

Mock Jury and Juror Responses to Uncharged Acts of Sexual Misconduct

Abstract. Internationally, admissible incriminating evidence of uncharged acts by the accused is presumed unfairly prejudicial, and remains controversial. In an experimental study, 325 jury-eligible citizens were randomly assigned to a simulated trial in which the accused faced two charges. Juries were exposed to no evidence of uncharged acts or prejudicial evidence describing four uncharged sexual acts by the accused reported by the complainant or two independent witnesses. Jury inferences about the accused’s sexual interest in children and his criminal intent were logically related to the source and type of evidence. While ratings of the likelihood of culpability increased with evidence of uncharged acts, juries were reluctant to convict solely on the basis of the complainant’s word. Jury deliberations disclosed that prejudicial evidence did not induce impermissible reasoning or a lower threshold of proof. Multiple convergent measures revealed little danger of unfair prejudice to the accused.

‘His winnowing fan is in his hand’

ABSTRACTIn order to minimize the risk of wrongful convictions from unreliable expert evidence judges have long considered it necessary to have regard to the reliability of expert evidence when considering its admissibility. In other words, judges have thought it appropriate for them to separate the wheat from the chaff and not simply leave it to juries. However, in IMM v The Queen (2016) 257 CLR 300, four of the seven judges concluded that save for some provisions of the Evidence Act 2008, reliability is a jury issue, not something for the judge to take into account when determining the admissibility of the evidence. This paper discusses four ‘windows of opportunity’ for judges to consider the reliability of expert evidence post IMM v The Queen and recommends the Evidence Act 2008 (Vic) be amended to expressly enable judges to have regard to the reliability of evidence when assessing the danger of unfair prejudice to an accused.

‘Reasonable Offers’ As a Defence to Unfair Prejudice Petitions: Prescott v Potamianos

AbstractIt is long established that a ‘reasonable offer’ for a petitioner's shares can defeat an unfair‐prejudice petition. Lord Hoffmann gave guidance about such offers in O'Neill v Phillips. Now, in Prescott v Potamianos, the Court of Appeal has set out three factors that help to determine in general whether an offer is ‘reasonable’. Those factors are: the value offered; the likelihood of implementation; and the proximity to the unfairly prejudicial conduct. The Court's guidance is useful for lawyers and their clients, as well as being broadly favourable for petitioners. But the Court emphasised that the unfair‐prejudice jurisdiction is based on fairness and so requires a considerable degree of flexibility. Such flexibility impairs the certainty that Lord Hoffmann was seeking to promote, and may create difficulties for parties making or receiving offers.

Definition of Hearsay, Fed.R.Evid. 801(a)-(c): Effect on Listener-Investigatory Background; Interrogation Accusations and Opinions

Definition of Hearsay, Fed.R.Evid. 801(a)-(c): Effect on Listener-Investigatory Background; Interrogation Accusations and Opinions

'Importing' Restrictions from One Federal Rule of Evidence Provision to Another: The Limits of Legitimate Contextual Interpretation in the Age of Statutes

In 1975, the Federal Rules of Evidence took effect. The basic policy thrust of the Rules was to simplify and liberalize the law of Evidence in federal court. In particular, as the Supreme Court has acknowledged, Federal Rule 402 was intended to deprive the courts of the power to either enforce or enunciate uncodified exclusionary rules. Yet, as Part I of this article demonstrates, in several lines of authority federal courts have relied on contextual interpretation to impose evidentiary restrictions that have no grounding in statutory text. The common fact pattern in these lines of authority is the following: One provision of the Federal Rules contains a restriction, a second provision is silent on the restriction, and the text of neither provision manifests a legislative intent to import the restriction from the first provision into the second. The question naturally arises as to what are the legitimate uses and limits of contextual construction. As Part II explains, the enactment of the Federal Rules roughly coincided with the emergence of the textualist school of statutory interpretation. For formal and practical reasons, textualists assert the primacy of text and caution against uncritical reliance on extrinsic legislative history material. Unlike extrinsic material, legislative text has the formal status of law; and extrinsic history materials are vulnerable to distortion from the influence of special interest groups. The diminished importance of extrinsic history has enhanced the importance of contextual arguments, that is, arguments based on other provisions in the same legislative scheme. After all, like the text being construed, the contextual provisions have the formal force of law. The question of contextual interpretation is not limited to the setting of the Federal Rules of Evidence. More broadly, it affects the construction of all legislation in the Age of Statutes. Part II uses the Federal Rule as a microcosm for exploring the concept of contextual interpretation. On the one hand, Part II identifies several perfectly legitimate uses of contextual interpretation. To begin with, the wording of one provision may be used to eliminate an ambiguity in the wording of a second provision. By way of example, the court may look to the character evidence prohibition codified in Rules 404-45 to inform the meaning of “unfair prejudice” in Rule 403. Moreover, a blanket prohibition on the admission of a certain type of evidence in one provision may necessitate a narrowing construction of another provision that would otherwise permit the introduction of that very type of evidence. Hence, the prohibition of the introduction of evidence of nolo contendere pleas in Rule 410 can require a limiting construction of Rule 801(d)(2)(A) on statements or admissions of a party-opponent. However, when neither of those uses of context is in play, with one exception a court may not simply import a restriction from one provision of the Federal Rules into another. Doing so exceeds the interpretive power of context. Subpart II.B proposes that the importation is justifiable only in the exceptional situation in which the extrinsic legislative history contains an extraordinarily powerful showing of a broad legislative intent to bar the admission of a particular type of evidence, not a narrower intent to prescribe a restriction in one provision of the Federal Rules. Part III uses the standard proposed in subpart II.B to critically evaluate the three lines of authority discussed in Part I. Part III concludes that two of the three lines are flawed; one does not manifest the right type of intent, and the second relies on extrinsic history that is too mixed and conflicted to qualify as an extraordinarily powerful showing of intent. Only one line of authority is based on extrinsic history that includes compelling evidence of an intent to prevent the admission of a certain type of evidence under any theory. Hopefully, this article will not only prevent misreadings of the Federal Rules but also contribute to the larger debate over the proper role of contextual interpretation in the Age of Statutes.

Why Is the Rule in Foss v. Harbottle Such an Important One?

SUMMARY The Rule of Foss v. Harbottle has established an elementary principle in the field of company law: the proper plaintiff for a wrong done to a company, is the company itself. This principle together with the ‘Salomon’ principle of separate legal personality of companies have been of invaluable importance for commerce and modern economy. On the flip side of the coin have always lain the minorities, commonly protected by derivative claims and unfair prejudice remedies. After the entering into force of the new statutory derivative actions, many scholars argued that the Rule of Foss was abolished, also that there would be an increase in shareholders’ litigation and have further expressed concerns about overlaps between both derivative actions and unfair prejudice remedies. This article argues that, irrespective of whether the Rule of Foss was amended from its original formulation, its underlying principles are still today of the utmost importance. It also analyses whether or not there has been such increase in litigation, and finally why it is of such relevance to keep the dividing line between derivative claims and unfair prejudice remedies very clearly drawn.

Evaluating the Credibility Using Prior Convictions: An Empirical Study of Rule 609 and Suggestions for Practical Reform

Rule 609 of the Federal Rule of Evidence allows a party to impeach a witness with his or her prior criminal convictions. It is fair to say that this rule is the most criticized of all the Rules of Evidence; scholars have been calling for its reform or outright abolition for decades. These critics argue that the rule relies on propensity evidence which has very little probative value in evaluating a witness’s truthfulness on the stand, and that — especially when used to impeach a criminal defendant — the evidence carries a high risk of unfair prejudice and often prevents defendants from testifying at trial. What has been missing from the debate so far is what is actually happening when judges apply Rule 609 in the courtroom. This article conducts an empirical study of Rule 609 in order to determine how the rule operates in practice. It first presents the results of a survey of law students and federal district court judges to determine how much probative value and unfair prejudice each group perceives exist for different types of prior convictions. The survey finds some differences between the groups, but overall it notes a surprising consensus that crimes of theft have a high probative value for proving lack of credibility, while other types of conviction do not. The article then examines how federal district court judges are actually applying Rule 609 in the courtroom. Contrary to the conventional wisdom, it shows that federal court judges do not routinely admit prior convictions to impeach criminal defendants, and that (consistent with the survey) judges tend to admit theft crimes more often than almost any other type of conviction. The review of district court decisions does indicate some extreme outliers and an unexplained and troubling tendency to admit crimes of drug possession. Thus, the conclusion of the article proposes a modest reform to Rule 609, which encourages the admission of theft crimes to impeach witnesses, but precludes the use of other types of criminal convictions as impeachment evidence.