Share of the Pie, but not the Privilege

The Irish High Court in Globoforce Group PLC (trading as Workhuman) v Luxembourg Investment Company 276 SARL and others [2026] IEHC 397 recently confirmed that the relationship between a company and its shareholders does not give shareholders the right to inspect the company’s privileged legal advice.

The Irish judgment comes less than a year after Privy Council decision in the UK in Jardine Strategic Limited v Oasis Investments II Master Fund Limited [2025] AC 1558 and was considered by the Court in reaching this determination.

Although the principle preventing a company from relying on legal advice privilege against its shareholders is now abolished, shareholder information rights are not impacted.  

Background to the Shareholder Rule and Legal Advice Privilege Interplay

Legal professional privilege includes legal advice privilege and arises in respect of confidential communication(s) between a professionally qualified lawyer and their client in circumstances where legal advice was sought and / or received.

The Privy Council in Jardine dated the Shareholder Rule back to in Gouraud v Edison Gower Bell Telephone Co of Europe [1887] LJ CH 498 and described it as being a rule

“that the shareholders could be said to be the beneficial owners of the company's property, so as to have paid for the legal advice of which they were seeking disclosure, even though the company was a separate entity, and because the directors could therefore be said to be trustees for the shareholders.”

The decision of Gouraud was applied in subsequent cases, until it was overturned in Jardine in 2025. In Jardine, the Court found that “[l]ike the emperor wearing no clothes…it is time to recognise and declare that the rule is altogether unclothed”.

Shareholder Reliance on the Shareholder Rule and Joint Interest Privilege

Globoforce concerned a claim by a Plaintiff company, a provider of “cloud based” employee recognition services, that the defendants had caused the company to lose a transformative opportunity to acquire another company. It was alleged that the defendants had initially been supportive of the transaction, but when the negotiations reached a critical point, they refused their consent in a move allegedly designed to further their own interests to the detriment of the Plaintiff. In the course of the proceedings, the Plaintiff asserted privilege over legal advice obtained by the company. The Defendants, shareholders (both direct and indirect), argued that, as a matter of Irish law, they were entitled to the production of legal advice which the company had obtained. The Irish High Court characterised this argument as being the “status based” shareholder rule such that a company could not rely on legal advice privilege against a shareholder.

The shareholders also submitted that, based on the High Court decision in Carlo Tassara Assets Management SA v Eire Composites Teoranta [2016] IEHC 10, they were captured by a ‘joint interest’ relationship such that joint interest privilege applied.

High Court rejected the Shareholder Rule and Joint Interest Relationship

The Court noted that although there was a general obligation for it to follow previous High Court decisions, in circumstances where the underlying English authorities were rejected, it was possible for it to depart from the precedent.

The Court was of the view that the shareholder rule was inconsistent with the rule from Salomon, specifically  that a “company has a legal personality distinct from it shareholders. It is the legal and beneficial owner of its property”. As such, the Court held that shareholders, while they have a proprietary interest in their shares with rights attaching to them (e.g. right to receive dividends etc), do not have either a propriety or beneficial interest in the company’s assets (including the privilege legal advice it sought / received).

The Court did not accept the submission that joint interest in the privileged legal advice arises from either the relationship of shareholder and company or a duty of good faith.

Conclusion

Following the above ruling, unless the company has waived its legal advice privilege, shareholders do not have the right to inspect legal advice obtained by it. However, as mentioned above, this does not remove or impact the information rights of shareholders.

The judgment clarifies the scope of legal advice privilege which will be of particular interest to corporates, boards and in-house lawyers. This confirmation, that a company can exercise privilege over its legal advice (unless waived or another exception applies) in shareholder disputes or other circumstances.

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If you have any queries about anything discussed in this article, please contact Rebecca McKittrick or your usual Power Law contact.