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Company Law Reform Bill [Lords]

There are two points here. First, it is already possible to bring such an action; the difference is that we are putting on to the statute book the rules that will govern it. Secondly, there are two stages: first, as the hon. Member for Kingston and Surbiton (Mr. Davey) said, there would have to be a prima facie case; and, secondly, the court would have to consider whether the decision was one that the directors could reasonably and independently have taken. That is a very high standard. People may not like the decision, and may come to the view that they would have taken a different one, but if it was found that the company could reasonably have taken it, an action of this sort would fail.