 Well, hello everyone. My name is Leslie Colton and I'm the teacher of the class on shareholder litigation and you'll see coming round now at a good test of student corporations to be able to get us to circulate the syllabus to everyone so you can see what I'm talking about and what the course covers. Now, just to say a few words about this course, it's intended to be an intensely practical course on the subject of litigation. Now, I know most of you have had considerable or at least some practical experience as working lawyers in your various countries. How many people have actually been involved in litigation? Right. Now, what we're going to do in this course is to look at the problems that arise in a corporate context when things go wrong and go horribly wrong. So most of the courses you're going to be dealing with, as part of the MCL, will tell you how things should go perfectly. I'm here to sort of provide the antidote which is to explain what happens when people behave in the way that they often do, which is that they try to cheat. They try to exploit and they try to deny the rights of other people's shareholders. Now, let me start by saying just a little bit about myself. I was at the bar for over 30 years and as a Queen's Council for the last 18 of those. That's a senior council English Bar. I practiced in this country in this field concentrating in particular on shareholder litigation, but also doing a lot of advisory work. And I also practiced and appeared in the courts of Hong Kong and a number of Commonwealth countries such as Bermuda, Cayman Islands, Turks and Caicos Islands and various other British dependencies. I was going to say including Northern Ireland, because you know Northern Ireland is a separate legal system, although part of the UK. And so I've got a fair amount of experience of this area. Now the idea of this course is to help you bridge the gap, which unfortunately so often exists in legal firms, particularly large law firms, between the advisory corporate lawyers and those who deal with litigation. It always struck me as someone who had to work in both camps and help. That was my practice. But there was this enormous gap in most particularly large law firms between the corporate advisory department and litigation. They almost somehow never spoke to each other. There were people in the advisory departments who were quite comfortable about advising the client up to the moment at which somebody issued proceedings and then they wanted to get rid of them as fast as they possibly could. And they passed them on to litigators, many of whom were general litigators, knew very little about corporate law and would then begin the process all over again. Now that has a marvellous advantage as far as the lawyers are concerned. It increases the expense to the client, but it's also incredibly undermining of confidence because the client is often left at sea. I mean who are these new people who have been asked to take the case or defend them in court? And so the purpose of this course, if I can put it that way, is to breach that gap, to give you, as people who are no doubt involved in transaction work and all sorts of things in the future, an understanding of the reality of litigation as far as corporate transactions are concerned and shareholder rights. So we're dealing with how to assess problems from such basic things as what documents do you ask for when your client turns up at your office? How do you take a statement? What do you then need in terms of information to place a case before the court? And also things like how on earth are you going to pay for all this? Who's going to finance the proceedings? Because costs, particularly nowadays, are a very, very important factor in assessing the prospects of any litigation. And we have to live in that world of reality. So one of the things that politicians, like they've even passed laws giving people rights to do things, but if there's no financial mechanism that enables them to get before the courts, it all becomes a bit of an uncertain mess. So essentially, this is a course on remedies, but looking at it from a practical point of view, and it will hopefully equip you with a number of skills that you might not otherwise possess, certainly without a number of years of experience. Now, we will be looking at a number of reported cases in the English courts, in the Privy Council, which as you know was and still is to some extent the highest court of appeal for many Commonwealth countries. And we'll also be looking at a number of overseas authorities from Commonwealth countries and also from Hong Kong, where the similar problems have been analysed by judges and how to deal with them and the way they deal with them. And we will be looking at the practicalities of the remedies that are available. Because one of the things you are going to see as we go through this and we'll be looking at statute law as well as decided case law, is that very often statute law provides a series of options and yet the judges tend to concentrate almost on a one size fits all type of remedy. And you have to ask yourself, well, why is that so? Now, I am still on the list as a deputy high court judge, but I, because now I retire from the bar, I can be quite rude about the judges and tell you why it is that they so often fail to provide an answer which the client, which the litigant really wants. If someone is a member of a company and is being badly treated, they often want to stay in that company but be treated properly. Or why, for instance, as a judge always insists, they get bought out. Why is that the only remedy that's applied in so many cases? That's the sort of practical thing. Now, I have put in front of you a list of the topics which is the way the course works. As you will see, we have eight seminars. Now, the seminars are two hour seminars, one week from the 22nd of January next year. It seems a long time away but we'll soon get there. There are two hour seminars every Wednesday starting at 2 o'clock, I think in the room opposite here, at 11. And in advance of each seminar, I will supply you with an eight or 10 page set of notes which cover the whole topic in detail, giving you lists of authorities and in one or two cases additional articles to read. We will have a lot of cases but I will identify, and you will soon get hold of this approach, the key cases that you must read before the seminar. So there are probably four, five, six major cases that you will need to look at in the law reports in the library. You come armed with those, we will then analyse those cases during the course of the seminar to see why the decisions were made and run. For those, I know you come from a whole series of countries and you may not be used to the English approach, which is adopted through most of the Commonwealth, to decided precedent and case law. It's a useful tool to be aware of and some people take a little while to grasp it but we will analyse the cases, try to work out the ratio of the decision which governs future cases on the same point and we will examine things in that way. And you also need to have available to you a set of company law statutes, particularly the companies act 2006. Now I think you'll probably be, you can get access to the online, you will see there are a whole variety of statute books that are available. There's a butler's blue book and there are a number of others, I've listed them in the course outline and you'll be able to see those and I'm sure they've been mentioned by other people. But we do need, because we're looking at in part statutory remedies that have been specifically provided for minority shareholders in particular. As far as textbooks are concerned, there really isn't a textbook for the course. So in that sense we're on our own. But the two main books to have a look at are Gowr's Catholic Law, which is now edited, at least in part by Professor Sarah Worthington, who's in charge of the LLM programme here. And I think Gowr's is now about, it costs £35 and it's over a thousand pages, about the best £35 worth you're going to find as corporate lawyers in terms of value. And also I've recommended Professor David Kershaw's book, which is a cases and materials book, he's a professor at the LSE in London, which is also covering the same area. And those two textbooks are the two that you really want to have user's references. But as I say, there's nothing precisely on the point, but the wider you're reading the better. And certainly to keep up with the sections of Gowr that govern the area we are, and I think it's an essential requirement, it's worth doing because you'll find it more interesting. So as with everything else, the more you read the more you'll get out of the course. Now the amount of reading isn't huge. It's meant to be bearable and anybody finds it beyond them. I would be very surprised knowing the capacity of you as a group of people. You're welcome to come along and try the course and if you don't like it you'll go elsewhere. So please bear it in mind. The seminars fit together. So if you look at the course list, we start off with introduction. We look at the different types of claim in the first seminar. A brief review of the law of directors duties, which I think is an essential ingredient because we'll be looking at breaches of duty and I want to make sure that we're all on the same page as regards the English law on this. Because English law has been codified by statute in 2006 and that is an attempt to sort of set out what the law was always meant to have been but with some changes. And we'll look at that and that will be the basis of everything that we go on thereafter to consider because you've got to know what is the proper contract before you can look at people's misconduct. And then we'll look at the jurisdiction of the courts, the role of the English companies, court and the impact of commonwealth authorities and so forth. And we'll also look very briefly at the issues of law reform. Now the second seminar deals with personal actions by shareholders. Those are the enforcement of their rights under the constitution of the article. How do you manage to enforce your rights? How do you enforce your right to vote in a meeting if it's being denied? How do you deal with things like tricky circulars? That's when the company sends out a letter to its shareholders which doesn't contain all the information that it should and they're accused of misleading the meeting. Can you get an injunction to stop the meeting? That sort of stuff. And we'll look at some of the remedies available against that. Then we move on in three to deal with derivative actions. These are shareholder proceedings brought for the benefit of the company but by an individual shareholder. And for which, again, this is now codified in the 2006 UK Companies Act, which there's a new statutory procedure and practice to get court permission before you can start these proceedings. And you can actually get an indemnity from the company to pay your costs of suing them if you can persuade the court there's a good enough case. There's a procedure to take into account. And we will have a look at that. We'll also have a look at something called multiple derivative actions. If the wrong that's being done is in a group of companies and so you're a shareholder of company A at the top, which is the quoted company but the fiddle or the theft or the breach of duty is taking place two or three layers down. And you're not a shareholder of that company. How do you get a remedy for that? And can you do so? I'm not really sure. And we'll make a comparison there with Hobble Con, which has a different approach. And then in four we look at what we call unfair credit dispositions. The Companies Act took 1990, Section 994, a whole concept of this being the main defensive weapon for shareholders. And we'll look at how we put together a case, the pleadings, the evidence, the types of claim and we'll examine that by comparison to other jurisdictions. And then we have number five, which is the part two of that, which looks at purely the remedies you might get from the court. This whole question of what are the options available. If you're buying somebody out, how do you value their shares? How do you value it? If you've got somebody who's got 10% of the company, they've been mistreated, do they get back as a value, 10% of the value of the company? Or do we recognise the reality is that that 10% isn't worth 10% of the company? Somebody from outside would only pay, I have a 50% discount to buying that minority state because it only gives them a certain limited amount of power in the company. All sorts of issues like that, the need for expert evidence and the sort of things that come up in that. And finally we'll look at arbitration as an alternative to this whole expensive crisis. Then in number six we look at just an equitable petitions, that's how you wind up a company. It's often referred to as the nuclear option. You actually had enough of the company completely, you simply want the company to be broken up and all its assets should be put into liquidation just as if it was insulted. Can you do that? And what limitations are there on it? What's the impact on the company if somebody presents a petition until it gets to trial because there might be a gap of 18 months? During that period. What happens to the running of the company in the meantime pending the trial? That sort of problem. And then in number seven we take our sort of, or perhaps could be described as a sort of very, we deal with a number of miscellaneous points. We deal with contested takeovers. Challenges to compulsory purchase of minority shares which is linked to takeovers because in this country if you get more than 90% on a takeover bid, you can buy up compulsory the balance. Or how can you stop that happening? Then the question of oppositional schemes of arrangement, that's a corporate reconstruction and you don't want it to happen. How can you go along? Where I was employed on many occasions just to wreck people's schemes of arrangement by raising as many legal points as one possibly could so the court didn't give approval for it. And where does that depend? For some time to takeovers are done this way because whereas you've got to get 90% for a straightforward cash offer and you're offering that straightforward way, if you get a scheme of arrangement, you probably only need the corporate majority that's required at 75% for special resolution, majority of the people involved. So lower test. And then we deal with limited liability partnerships which are a different type of creature. And finally we'll deal with questions of actions against auditors and accountants which I've spent a lot of my life dealing with, suing incompetent advertisements for producing or failing to detect outright fraud taking place. And to what extent does that provide a remedy, either for the company or for liquidators or anything like that. In a way it's a separate topic but we will touch on it so that you get to understand because this is one of the biggest areas that I want to be dealing with, like the people that's Bernie Madoff and his auditors, that sort of thing. Are they vulnerable to attack? And finally we end up with the last seminar which is on costs, settlement alternatives and mediation. Because everything that we look at, I was just saying to some people before, I always regarded as a failure as a litigation lawyer if my case is ended up in court. Because the important thing is to have a strong, well-organised case that you get the points across to the other side that they realise are a straight field case and then they want to settle. They want to bring the matter to the players. Now what are the various ways of doing that? And how do we achieve settlements of proceeding in complex matters? And we'll have a look at the whole issue about mediation and also look at a little bit of arbitration, but more at the whole process of trying to achieve a settlement and reduce the costs. And are there methods whereby you can use procedural devices to make offers which if not accepted will protect you so that even if you lose the case, because the other side didn't do as well as you offered them, they end up paying the cost of the entire trial. It's a great sort of feeling of success if you've actually, you've got a bad case, you know you're going to lose, you make an offer, the other side don't achieve that offer and then they actually have to pay for the whole trial process. And a few times in my life I've managed to achieve that being just about right, usually to the cuter points of the judge afterwards who would find out, you know, did I get it wrong? You really offered more than I had hoped because the judge doesn't know about that offer. It's secret from him till he's given his judge. So we'll look at all that sort of material and from a practical point of view the exam will involve the end of the term and there will be a week, ten days before the exam is after the last seven months. It'll be an open book exam this year. That means you're going to take along your materials. It's not going to be a memory test. It's a test of what you understand. There will be five, probably five questions of which you'll have to answer three. There'll be at least one essay and there'll probably, as I say, four, likely to be four problem questions which we'll test. Examples of the sort of things we've been looking at, how do you deal with them? What are the options? That sort of thing. And you'll have to get three questions in two hours under that. You'll be able to take your notes and your statutes with you. If anybody has any doubt about any aspect of it, you can always come and see me afterwards and we can speak in January. Let me just say this. Last year, because we had a large contingent of people who were fairly unfamiliar with the common law system, I did put in an extra class and I'm perfectly happy to do it this year. Our first class, four months, seven hours, will be on the 22nd of January. And what I will do is I'll be here on the 15th, that's the week before, at two o'clock and I'll email you to remind you this because I'm sure you won't remember today. I may not have any difficulties myself, but I'll be here on the 15th and that will give you an opportunity to come along to the seminar room for an hour or so and you can either privately or as a group. Any of you are interested, we can talk through the topics and answer them because on that stage you'll have had experience of other people's classes and modules and you may want some reassurance. But as I say, the first, most important thing to bear in mind is that our first formal seminar is very much an introductory session and it's designed to sort of get everybody together. So, finally, I'm going to say this, of course it's designed to give you some skills that you won't otherwise obtain. It should be a lot of fun with a fair amount of laughter, I hope, involved as to when we consider what people actually get up to and the steps that are needed to prevent them from getting away with it. And to give you some understanding of the sort of disasters that can really happen, both in terms of how you conduct litigation, if you get it wrong, but also the sort of miserable misconduct that sometimes takes place where people attempt to exploit their position. I'll be round over the lunch break, so if anybody wants to have a chat about anything, please do so.