The recent Supreme Court case THG Plc v Zedra Trust Company (Jersey) Ltd [2026] UKSC 6 (Zedra) is a landmark company law decision in which it was held that unfair prejudice petitions advanced under section 994 of the Companies Act 2006 aren’t subject to statutory limitation periods.
Here, Adam Goadsby explains how this affects your rights as a shareholder in the UK.
A shareholder’s right not to be ‘unfairly prejudiced’
The Companies Act 2006 provides a legal mechanism for shareholders in a company to ‘petition’ the court for relief in circumstances where the affairs of the company are being conducted in a manner that’s unfairly prejudicial to their interests as shareholders.
While unfair prejudice can manifest in many forms, common examples include:
- an improper failure to pay dividends
- a breach of the company’s articles of association
- directors breaching their statutory duties.
If a shareholder succeeds in bringing an unfair prejudice claim, the court has a wide discretion as to the relief that it’s able to grant. That relief can be both monetary and non-monetary. However, the court will usually order that the petitioning shareholder is ‘bought out’ at a fair value by other shareholder(s) and/or the company.
Cases founded on allegations of unfair prejudice commonly find their way into the senior courts of England & Wales. Until as recently as 2024, it was widely understood that there was no strict time limit to bring such a claim to court.
Limitation in legal claims explained
In the great majority of legal actions, there are time limits that govern when a claim must be lodged at court. These limits are contained within the Limitation Act 1980. A common example is in relation to a breach of contract. A claim must be lodged within six years following the ‘breach’ of said contract. If the claim isn’t issued in time, it’s time-barred and will fail.
Although this may seem arbitrary, the rules generally apply for public policy reasons (i.e., to ensure finality and guard against ‘stale’ claims being allowed to proceed long after the event).
However, until Zedra, this didn’t apply to unfair prejudice claims.
The decisions of the lower courts
Zedra is a minority shareholder in THG and issued a claim against THG in January 2019.
Importantly, Zedra applied to amend its claim. The amendment sought to include a complaint that Zedra was wrongfully excluded from the issue of bonus shares by the directors of THG in July 2016. Zedra claimed that — had it been issued those bonus shares — it would have converted the shares shortly prior to THG’s IPO. Zedra estimated that its losses for being unable to do so fell between approximately £1.8m and £2m.
In January 2023, the High Court granted the amendment on the previously understood basis that unfair prejudice claims weren’t subject to limitation periods under the Limitation Act 1980. THG appealed the decision and succeeded. The Court of Appeal looked at the issue ‘afresh’ and held that the amendment was time-barred because a limitation period of six years applied under the Limitation Act 1980.
This decision effectively reversed what was understood to be decades of settled company law. Zedra subsequently appealed to the Supreme Court.
The decision of the Supreme Court
The basic question for the Supreme Court to decide was whether the six-year and/or 12-year time limits in the Limitation Act 1980 (depending on the type of claim advanced) applied to unfair prejudice claims.
By a majority decision (of four to one), the Supreme Court clarified that unfair prejudice claims aren’t subject to limitation periods under the Limitation Act 1980. In doing so, it reviewed centuries of legislative history and common law development.
In short, the Supreme Court found that the provisions under section 994 and section 996 of the Companies Act 2006 are unique from other claims arising out of statute. The unfair prejudice mechanism exists to (potentially) allow a wide discretion of relief in respect of the company’s state of affairs and doesn’t contain or enforce obligations in and of itself (which claims under the Limitation Act 1980 would otherwise do).
In his dissenting judgment, Lord Burrows expressed that such a distinction was potentially problematic — suggesting that, in a sense, all causes of action can be analysed in terms of rights and obligations. Nonetheless, that distinction is now law.
In essence, the decision has restored what was long understood to be the historic position.
What this means for the rights of shareholders
Does this mean that a shareholder could bring a claim regardless of how long ago the events occurred? Probably not.
Although it’s now correct to say that there’s no statutory limit that would prevent a shareholder from bringing a claim, that isn’t the end of the story.
The answer to the question lies within the wording of the Companies Act 2006, which provides that the court “may make such order as it thinks fit for giving relief in respect of the matters complained of”.
In other words, the court still has a wide discretion as to whether to grant relief as well as the extent of that relief.
Such discretion is governed by equitable principles (i.e., reasonableness and fairness). It’ll therefore depend on the facts of each specific case.
One of those key principles is that an equitable remedy may be barred where there has been unreasonable delay by the claimant(s) in commencing proceedings, such that it would be unjust to the defendant(s) for the remedy to be granted.
Ordinarily, delay will begin to run from when the claimant discovered — or reasonably ought to have discovered — the reason for seeking the remedy.
This means that rather than being constrained by rigid six- or 12‑year time limits, unfair prejudice claims rise or fall on acquiescence and the resulting prejudice that would inflict on the company or defendant shareholders.
In a sense, the position therefore remains the same: if you believe that you have a claim, you should get on with it bringing it as soon as possible.
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If you need trusted advice from solicitors who support shareholders day-in, day-out, talk to us by calling 0151 600 3493, emailing hello@shareholderrights.co.uk or sending us a message.
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