There is more shareholder litigation, for better or worse, in the United States than in Australia. Perhaps some of the reasons why shareholder litigation is pursued more vigorously in the US are the ability of shareholders to retain legal counsel on a contingency fee basis, the rules requiring the corporation to pay the shareholders’ attorney’s fees, and the shareholder derivative suit mechanism. These remedies are not commonly available in Australia.

The objective of this paper is to address some of the issues relevant to the relative ease with which injured shareholders in the United States may pursue their claims against corporate management.