A key principle of English law is that double recovery of losses should be avoided. In company law a related concept has emerged, known as the principle of reflective loss. This prevents a shareholder in a company from suing a wrongdoer for the reduction in the value of shares or distributions when the loss suffered is a ‘reflection’ of a loss sustained by the company. The intention is to ensure equality between shareholders as a whole and to underline that each shareholder’s investment follows the fortunes of the company.

In 2013 as part of the so called “Jackson reforms” to civil litigation, the ability to recover Conditional Fee Arrangement (“CFA”) success fees and After The Event (“ATE”) insurance premiums from other parties in litigation was removed. Insolvency practitioners bringing claims on behalf of insolvent companies were exempt from the application of these new provisions; however the Ministry of Justice announced in December 2015 that the exemption would be lifted in April 2016.