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Companies Act 2006

Section 264: Application for permission to continue derivative claim brought by another member

503.This section addresses the possibility that, where the court has already decided that there is an appropriate case for a derivative claim and a member has commenced or continued a claim:

  • the manner in which the member commenced or continued the claim may amount to an abuse of the court (e.g. the member brought the claim with a view to preventing another member from bringing the claim);

  • the member may fail to prosecute the claim diligently;

  • it may be appropriate for another member to continue the claim (e.g. because the member who brought the claim has become very ill).

504.The section provides that, in these circumstances, another member may apply to the court to continue the claim as a derivative action.

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