What is the reflective loss principle?
• The English law principle of reflective loss traditionally held that when a company suffered loss as a consequence of the actions of a third party, the loss suffered by its shareholders - by way of diminution in value of their shareholding and/or distributions - constituted ‘reflective loss’ only, and is not damage which is separate and distinct from that suffered by the company. The principle has therefore generally prevented claims by shareholders to recover such loss directly.
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