Correcting Corporate Benefit: How to Fix Shareholder Litigation by Shifting the Doctrine on Fees

Authors

Sean J. Griffith, Fordham University School of LawFollow

Document Type

Article

Publication Title

Boston College Law Review

Volume

56

Publication Date

2015

Keywords

Corporate Law; Shareholder Litigation; Attorneys' Fees; Corporate Benefit; Fee Shifting; Derivative Suit; Class Action; Mergers; Acquisitions; Corporate Governance

Abstract

The current controversy in corporate law concerns whether firms can discourage litigation by shifting its cost to shareholders. But corporate law courts have long engaged in fee-shifting—from shareholder plaintiffs to the corporation—under the “corporate benefit” doctrine. This Article examines fee-shifting in share-holder litigation, arguing that current practices are unsound from the perspective of both doctrine and public policy. Unfortunately, the fee-shifting bylaws recently enacted in response to the problem of excessive shareholder litigation fare no better. The Article therefore offers a different approach to fee-shifting, articulating three specific reforms of the corporate benefit doctrine to quell the current crisis in shareholder litigation.

Recommended Citation

Sean J. Griffith, Correcting Corporate Benefit: How to Fix Shareholder Litigation by Shifting the Doctrine on Fees, 56 B.C. L. Rev. 1 (2015)
Available at: https://ir.lawnet.fordham.edu/faculty_scholarship/569