Multiple derivative action and common law derivative action revisited: a tale of two jurisdictions

Abstract

In England, the new Companies Act 2006 has replaced the common law derivative action with a new statutory derivative action but does not allow multiple derivative actions. In Hong Kong, a new statutory derivative action has also been introduced, but the common law derivative action is preserved. As in England, multiple derivative actions are also not provided for by statute in Hong Kong. This paper examines whether it was right to abolish the common law derivative action in England and whether such action should be abolished in Hong Kong. It further considers whether multiple derivative actions should be provided for in both jurisdictions.