Shareholder dispute mediation and advisory counsel.
Independent mediators and advisory counsel for shareholder disputes, director disputes and company deadlock. Confidential, fixed fee, and structured to settle in a day rather than a trial.
Shareholder disputes rarely stay commercial for long. A company that two or three people built together stops functioning, dividends dry up, one shareholder is shut out of the management they were promised, and every board meeting becomes a rehearsal for litigation. The legal remedies exist, but an unfair prejudice petition takes many months, is fought largely over valuation evidence, and is public. Mediation puts the same outcome on the table in a single confidential day.
Clerk&Counsel places experienced commercial practitioners on shareholder dispute resolution in two distinct roles. The first is advisory, where counsel reads the articles, the shareholders agreement and the board minutes and tells you what your position is worth and how to get there. The second is as mediator, where a neutral takes both sides through a settlement structure that a court could not order, including staged payments, handover of clients and an agreed public statement.
We are a clerking agency rather than a chambers or a firm of solicitors. Instructions come from companies, founders, minority shareholders, investors, family businesses and the solicitors acting for them, and we work on both a direct access and a solicitor instructed basis.
What shareholder dispute mediation actually does.
A mediation is a private, without prejudice day. The mediator has no power to impose a decision, which is exactly why it works. Each side sets out its case briefly, then the mediator moves between rooms testing assumptions, pressure testing valuation figures and finding the terms that both sides can live with. Because nothing is binding until a settlement agreement is signed, parties will explore options in a mediation that they would never concede in correspondence.
Shareholder disputes are well suited to it because the settlement almost always has moving parts that a judge cannot deliver. A buyout may need to be paid over eighteen months out of trading profits. A director may need to resign but stay on as a consultant through a handover. Personal guarantees may need releasing by the bank. Loan accounts, company cars, pension arrangements and the family home used as security all sit alongside the share price, and all of them can be resolved in the same document.
- 50/50 deadlock between two founding shareholders where neither can outvote the other.
- Minority shareholder exclusion, withheld dividends and excessive director remuneration.
- Share valuation disputes, including arguments about minority discounts and quasi-partnership treatment.
- Disputes over pre-emption rights, drag along and tag along clauses and transfer restrictions.
- Director disputes and boardroom breakdown, including removal under section 168.
- Family company disputes where the shareholders are also parents, siblings or spouses.
Advice before you commit to a route.
Advisory work is often the more valuable instruction, because the choice of route determines the cost of the whole dispute. Counsel will read the articles of association, any shareholders agreement, the statutory registers, recent management accounts and the correspondence, and give you a written view on whether the conduct complained of is unfairly prejudicial, what remedy a court is likely to give, and what a realistic settlement range looks like.
That advice also covers the practical steps that protect your position while the dispute runs. Requisitioning a general meeting, exercising the statutory right to inspect the register of members, making a request for company records, and preserving evidence of diverted opportunities all have to be done properly and early. So does the decision about whether to stop drawing a salary or resign as a director, which can quietly damage a claim if it is taken without advice.
Where an offer is on the table, counsel can value it against the litigation alternative and draft the counter proposal. Many shareholder disputes are settled at this stage without either party ever issuing a petition.
Unfair prejudice, derivative claims and winding up.
The main statutory route for a minority shareholder is a petition under section 994 of the Companies Act 2006 on the ground that the company's affairs are being conducted in a manner unfairly prejudicial to the petitioner's interests. The usual remedy is an order that the respondent buys the petitioner's shares at a value fixed by the court. In a quasi-partnership, where the company was formed on an understanding of mutual participation, the shares are often valued without a minority discount, which materially changes the number.
Where the wrong is done to the company rather than to the shareholder personally, a derivative claim under Part 11 of the Companies Act 2006 may be the correct vehicle. Permission is required at an early stage and the test is not straightforward, so the strategic choice between a derivative claim, a petition, or both in parallel needs to be taken with advice.
A just and equitable winding up petition under section 122(1)(g) of the Insolvency Act 1986 remains available for genuine deadlock, but it is a remedy of last resort. It is also a serious step, because presenting a winding up petition can trigger bank facility breaches and freeze the company's accounts.
Instructing a mediator or advisory counsel.
The process is deliberately short:
- Send a brief outline of the company, the shareholdings and what has gone wrong. No documents are needed at this stage.
- We run conflict checks and shortlist a mediator or advisory counsel with the right sector experience.
- You receive a written fixed fee for the mediation day or the advisory piece before anything is committed.
- Papers are exchanged, position statements are filed with the mediator, and the day is listed, usually within two to four weeks.
Specialist areas within this practice.
- Partnership dispute mediation
Mediation for partnership and LLP fallouts, expulsions and exits.
- Director disputes
Boardroom breakdown, removal, and director duty claims.
- Shareholder and partnership disputes barristers
Counsel for unfair prejudice petitions and derivative claims.
- Commercial mediation
Wider commercial and business dispute mediation.
Shareholder dispute stuck in correspondence?
Send a short outline of the company, the shareholdings and the issue. A clerk will come back with mediator or advisory counsel options and a fixed fee.
Common questions.
How do you resolve a shareholder dispute without going to court?
Most shareholder disputes settle through a negotiated buyout of one party's shares, and mediation is the fastest way to get there. A mediator holds a confidential day with both sides, tests each position privately, and works through valuation, timing, payment terms, warranties and the resignation of directors in a single settlement agreement. Nothing said in the mediation can be used later if it does not settle.
What happens in a 50/50 shareholder deadlock?
A 50/50 company has no majority to break a tie, so the board and the general meeting can both stall. The legal fallback is a just and equitable winding up petition, which usually destroys value for both shareholders. Mediation is used to find a workable alternative, normally one side buying the other out, a demerger of the business into two, or an agreed sale of the whole company to a third party.
Is mediation suitable where an unfair prejudice petition has been issued?
Yes, and it is often the point at which mediation works best. Once a section 994 petition is on foot both sides know the likely remedy is a buyout at a fair value, so the argument narrows to price and terms. Mediation lets the parties settle that without the cost of a valuation trial, which in a small company can consume more than the shares are worth.
Can the same person advise me and act as mediator?
No. A mediator is neutral and cannot advise either side. What we can do is place advisory counsel for you and, in a separate instruction on a different matter, offer a mediator from the panel. We keep those roles strictly apart and confirm the position in writing before anyone is instructed.
How much does shareholder dispute mediation cost?
A mediation day is quoted as a fixed fee agreed before the instruction, usually split between the parties. The fee depends on the value and complexity of the dispute and the reading time required. Advisory work is quoted either as a fixed fee for a written opinion or an agreed hourly rate for ongoing input.
Are you a barristers' chambers?
No. Clerk&Counsel is a clerking agency and a trading style of Found First Digital Ltd. We place independent barristers regulated by the Bar Standards Board and non-barrister specialists, and the instruction runs directly between you and the individual you instruct.