Abstract

To what extent should the decisions of companies' directors and controlling shareholders be challenged in litigation brought by disgruntled shareholders? The response in the United States tends to differ from that in Australia and Great Britain and to produce divergent legal rules for the regulation of shareholder litigation. Nonetheless, to some extent these dissimilar legal rules reflect common policy concerns created by shareholder litigation. This article begins with a brief sketch of the development of rules governing shareholder derivative suits. It traces the subsequent evolution of controls imposed on shareholder litigation in each country, using a comparative perspective to illustrate relative strengths and weaknesses.