- derivative claim
A claim brought by a member of a company under Part 11 of the Companies Act 2006 in respect of a cause of action vested in the company, and seeking relief on behalf of the company. The procedure for this type of application is set out in CPR 19.9 () and its practice direction.+ derivative claimUSAA litigation claim brought by a stockholder on behalf of a corporation against a corporation's management or board of directors typically alleging breach of fiduciary duty, fraud or mismanagement. The procedure for a derivative claim is governed by state law, but typically a stockholder must:• Have been a stockholder at the time of the alleged wrong doing.• Retain ownership throughout the litigation.• Make a demand on the board of directors to take corrective action or show that such a demand would be futile.
Practical Law Dictionary. Glossary of UK, US and international legal terms. www.practicallaw.com. 2010.
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