Shareholder activism faces steeper hurdles in Ireland

The directors’ and officers’ liability (D&O) insurance discussion, titled Regulatory Developments in Ireland – The Gateway to Europe, said that recent cases brought in the Republic underlined that the legal and legislative landscape discourages shareholder activism.

Speaking during the panel, Francis Keen, partner at McGill and Partners, said: “From a D&O perspective, Ireland is an interesting place for a number of reasons. There are UK companies that have been set up there since 2016. But there’s also been a wave of immigration from US companies that were ready to take advantage of the tax regimes that were more friendly to US corporations.”

Louise O’Reilly, a partner at DAC Beachcroft, addressed the question of how shareholder activism might manifest in Ireland.

She said: “In terms of the clientEarth action [UK High Court case involving the directors of Shell], the mechanisms for bringing derivative actions in Ireland are narrower than those in the UK. The action was brought under Section 216 of the Companies Act related to the negligence of the company directors. This would not be an option for shareholders in Ireland. The ability to bring these actions is very limited. We also have Section 212 of the Companies Act that permits these actions, but these are quite narrow.”

Asked whether this made Ireland a favourable place to invest, O’Reilly said that this was more due to the favourable corporate tax regime.

She added: “Ireland has a very skilled workforce and it’s the sole EU jurisdiction that’s English speaking after Brexit. And our development authority has been really active in the US markets in introducing investments to Ireland.”

Read:

The ClientEarth claim against the board of Shell: A sign of things to come in the UK?

OVERVIEW

McGill & Partners published 19th June 2023

https://www.airmic.com/technical/library/clientearth-claim-against-board-shell