Monday 10 June 2024
Dear Subscriber,
I hope you had a great weekend. Please see below for the question, the answer to the previous question and associated resources. This is the web version of this newsletter.
Question: Tom is driving his car carefully through a residential neighbourhood when he suddenly loses control of his vehicle due to a defect in the brakes, which he was unaware of. As a result, he swerves onto the sidewalk and hits a pedestrian, Sarah, causing her significant injuries. Sarah decides to sue Tom, seeking compensation for her injuries and medical expenses. Tom argues that he should not be held liable because the brake defect was a manufacturing fault that he could not have foreseen or prevented.
Which of the following principles is most relevant in determining Tom’s liability for Sarah’s injuries in this case?
1. The principle of vicarious liability
2. The principle of strict liability
3. The principle of duty of care
4. The principle of contributory negligence
5. The principle of res ipsa loquitur
Study Material: Solve MCQs live with me on YouTube! You can access the latest stream here. If you are looking for reading material on this topic, I recommend* the title you can find here.
Special Offer: Want an AI SQE tutor? Newsletter subscribers benefit from a special discount to Practice Works AI-led learning support for SQE1. Visit https://www.practiceworks.io/sqe-prep and use IOANNIS20 for 20% off any paid plan (available only for the first 30 people who use it!). Terms & Conditions apply.
Answer and feedback to last week’s question: GlobalTech Ltd, a private company, has recently held its annual general meeting (AGM). During the meeting, the board of directors proposed a significant amendment to the company’s articles of association. The amendment would introduce stricter voting requirements for certain types of shareholder resolutions, effectively reducing the influence of minority shareholders. Jane, a minority shareholder holding 10% of the company’s shares, opposed the amendment but was outvoted by the majority shareholders. Jane seeks to challenge the amendment.
Which legal mechanism allows Jane to challenge the amendment to the company’s articles of association?
1. Derivative action under section 260 of the Companies Act 2006
2. Petition for unfair prejudice under section 994 of the Companies Act 2006
3. Application for judicial review under the Administrative Court’s jurisdiction
4. Action for breach of directors’ duties under section 172 of the Companies Act 2006
5. Claim for misrepresentation under the Misrepresentation Act 1967
Correct Answer: 2. Petition for unfair prejudice under section 994 of the Companies Act 2006. Feedback: Section 994 of the Companies Act 2006 provides a mechanism for minority shareholders to petition the court for relief on the grounds that the company’s affairs are being conducted in a manner that is unfairly prejudicial to their interests. In this scenario, Jane can challenge the amendment to the articles of association by filing a petition for unfair prejudice, arguing that the new voting requirements diminish her rights and influence as a minority shareholder. This section is specifically designed to protect minority shareholders from actions by the majority that are unjust or inequitable. The other options are not directly applicable in this context: derivative actions address wrongs done to the company, judicial review applies to public law matters, actions for breach of directors’ duties focus on directors’ conduct, and claims for misrepresentation involve false statements inducing contract formation. Therefore, Jane’s most appropriate legal recourse is to petition for unfair prejudice under section 994.
Thank you for subscribing and let me know how you are getting on in your preparation through our Facebook Group. Feel free to forward this email to anyone you think will benefit.
You will hear from me again soon.
All the best
Dr Ioannis Glinavos
*As an Amazon Associate, I earn from qualifying purchases.
Leave a Reply