Are you (really) running out of time?

If you want to bring court action against someone there is usually a time limit within which you must commence such action. For most cases, the answer as to how long you have is contained within the Limitation Act 1980 (“the Limitation Act”).

One exception to this had been if you are a minority shareholder wishing to bring an action for Unfair Prejudice pursuant to s994 of the Companies Act 2006. This is a specific type of claim (petition) that can be brought by a member of a company if they believe that they have been unfairly treated and/or that their rights have been disregarded by the company and/or the other shareholders.

It had been understood that the Limitation Act did not apply to these kinds of claims and that, technically, there was therefore no time limit within which they must be brought. This was however changed in 2024 when the Court of Appeal handed down its judgment in the case of Thg PLC v Zedra Trust Company (Jersey) Limited [2024] EWCA Civ 158.

The Court of Appeal determined that the Limitation Act did apply and, therefore some remedies pursued through an unfair prejudice petition were bound by a 12-year limitation period starting from the date the cause of action arose. This was distinct from cases seeking only compensation or monetary relief, which it was determined were subject to a six-year limitation period in accordance with the Limitation Act.

The decision in the Court of Appeal was appealed up to the Supreme Court who handed down its judgment on 25 February 2026. The Supreme Court overturned the Court of Appeal’s decision and confirmed that the Limitation Act, in fact, does not apply to unfair prejudice petitions.

What happened?

On 7 January 2019, Zedra Trust Company (Jersey) Limited (“Zedra”) issued an unfair prejudice petition against Thg PLC (“Thg”) and 14 other named individuals who were, or had been, directors of the company. The original petition made several complaints, all of which were struck out or dismissed.

Zedra made an application on 22 June 2022 to amend its petition to claim compensation for losses it had suffered after an alleged variation of its dividend rights in July 2016. The High Court, in first instance, allowed Zedra to amend its petition.

Thg appealed the High Court as it argued that the claim was time barred under the Limitation Act. It argued that as the conduct complained of happened over six years prior to the petition being amended it should not be allowed to proceed.

The Court of Appeal had to consider whether the Limitation Act applied to unfair prejudice petitions as it had previously been understood that it did not.

In their judgment, the Court of Appeal decided that the Limitation Act does apply. On the facts, the Court of Appeal therefore decided that Zedra’s claim was time barred pursuant to the Limitation Act.

The Court of Appeal did acknowledge in its judgment (though this was a general discussion and so was not, a definitive statement) that if a claim is for a share buy-out order (which is the normal remedy in these kinds of claims), it would likely not be caught by Section 9 of the Limitation Act because it is not a claim for compensation. The Court of Appeal suggested that the 12-year limitation period could apply however, there will need to be further case law to determine this issue.

Zedra appealed the Court of Appeal’s decision to the Supreme Court who recently handed down its judgment.

What did the Supreme Court decide?

By a majority of four to one, the Supreme Court determined that an unfair prejudice petition under section 994 is not “an action upon a specialty” within the meaning of section 8 of the Limitation Act and a claim for monetary compensation within an unfair prejudice petition is not “an action to recover any sum recoverably by virtue of an enactment”.

As a result of these determinations, no statutory limitation period applied to a section 994 unfair prejudice petition.

The Supreme Court overturned the Court of Appeal’s decision.

Impact

So, what does this mean?

This means that, although the Limitation Act provides a reference point, courts retain flexibility to allow claims or amendments in appropriate circumstances, particularly where minority shareholders would otherwise be denied an effective remedy. As a result, the Supreme Court’s decision restores a degree of judicial discretion and ensures that procedural time limits do not unduly restrict access to justice in cases of genuine unfair prejudice.

It is important to note however that this does not detract from the fact that it is always best to take swift action if you, as a shareholder, consider that you have been unfairly prejudiced.

Prompt action is always recommended in any dispute scenario.

If you have any questions in relation to time bars for bringing actions or if you are a shareholder that has been unfairly prejudiced (or find yourself having to respond to such a petition) please contact Chloe Goodwin in our Commercial Litigation Team.