The right to bring an unfair prejudice is an important safeguard for many minority shareholders. It offers a route to court where a company’s affairs are being run in a way that unfairly harms your interests – often in circumstances where you have little or no control.
Where the court agrees that a minority shareholder has been unfairly prejudiced it will usually order that the majority shareholder buy out the minority shareholder, although the court has power to provide a different remedy.
A recent decision of the Supreme Court in THG Plc v Zedra Trust Company (Jersey) Ltd has provided welcome clarity on a key question concerning unfair prejudice petitions: how long does an aggrieved shareholder have to bring such a claim?
Dan Gibson, Associate in Thrings’ Commercial Dispute Resolution team, takes a look at the outcomes of the case and what it means for minority shareholders.
The background – a surprise from the Court of Appeal
Historically, it was widely understood that unfair prejudice petitions under section 994 of the Companies Act 2006 were not subject to statutory limitation periods under the Limitation Act 1980. In simple terms, there was no fixed six or 12-year cut-off as there is for many other types of legal claim.
That understanding was shaken in 2024, when the Court of Appeal held that limitation periods did apply to petitions brought under section 994.
In its decision in THG v Zedra, the Court of Appeal concluded that:
- Unfair prejudice petitions could fall within the 12-year period under section 8 of the Limitation Act 1980 (for actions “upon a speciality”); or
- Where only monetary relief was sought (rather than the more common order requiring the majority to buy out the minority’s shares), a six-year period under section 9 might apply.
In practical terms, this meant that certain aspects of the petition in that case were determined to be made out of time and therefore “statute barred”. That was a significant shift in principle – and a concern for minority shareholders who may not act immediately when issues first arise.
The Supreme Court’s decision – position restored
Zedra appealed, and on 25 February 2026 the Supreme Court overturned the Court of Appeal’s ruling, restoring the previously understood position that there is no statutory limitation period for unfair prejudice petitions under section 994 of the Companies Act 2006.
Why this matters
Unfair prejudice claims often arise in closely held or family private limited companies where the majority shareholder(s) have control and relationships with the minority shareholder(s) have deteriorated over time. The conduct complained of may be ongoing or may only become fully apparent after several years – for example, exclusion from management, diversion of business opportunities, improper dilution of shareholdings or the majority awarding themselves excessive remuneration.
The Supreme Court’s decision removes the risk that a minority shareholder’s claim will automatically fail because a fixed statutory period has expired.
The absence of a limitation period, however, does not mean that time is irrelevant. Courts will continue to expect shareholders to act reasonably so, if a minority shareholder delays unreasonably in bringing a petition, the court may conclude that the minority shareholder has agreed to and/or acquiesced in the conduct that they are now complaining about. This would make it unfair to grant a remedy to the minority shareholder, even if the conduct is prejudicial to their interests.
In those circumstances, even though the claim is not time barred, the court may refuse or limit the relief sought. Whilst in theory a minority shareholder could seek to rely on prejudicial conduct of the affairs of the company that goes back many years, the longer they have known about it and not taken action, the less likely it is that the court might be willing to grant them a remedy. Each case will be determined on its own facts.
What should you do?
If you are a minority shareholder and concerned about how a company is being run, there are some sensible steps to take:
- Do not ignore early warning signs – Exclusion from decision-making, lack of transparency, or changes to dividend policy may all be indicators of potential unfair prejudice.
- Keep records – Retain board minutes, shareholder communications, financial statements and correspondence. A clear evidential paper trail is often critical in these disputes.
- Seek advice early – Even though there is no fixed limitation period, delay can weaken your position. Early legal advice can help you assess whether the conduct is likely to meet the legal threshold and what remedies may realistically be available.
- Consider the commercial objective – Many unfair prejudice petitions ultimately seek a buy-out at a fair value. Understanding your desired outcome – exit, reinstatement, or change in governance – will shape the strategy from the outset.
- Explore early resolution options: Court proceedings are not always the first or best step. Mediation or structured negotiations can sometimes achieve a more cost-effective and timely solution, preserving value in the business and, potentially, avoiding relationship breakdowns.
Dan Gibson, Associate in Thrings’ Commercial Dispute Resolution team, said: “This is an important and reassuring outcome, restores clarity and removes an unexpected procedural hurdle for any minority shareholder wanting to ensure their position within their business is not undermined.
“However, unfair prejudice claims remain complex and highly fact specific. If you believe your interests as a shareholder are being unfairly harmed, taking prompt, informed legal advice remains the best way to protect your position and maximise your options.”
The Thrings Commercial Dispute Resolution team has an outstanding track record in achieving success in court, also offering expertise in mediation, pre-action work, settlement negotiations and arbitration to deliver commercially focused solutions to minimise disruption to your business. Contact us to find out more.
