To enable a diversity of management approaches to risks and reinforce the most common forms of corporate rules with a high degree of permissible management power, many jurisdictions have implemented minimum thresholds and grounds (procedural and substantive) to such suits.
Any proceeds (damages and interest in English law) of a successful action are awarded to the corporation and not to the shareholder(s) as the controlling claimant.
[3] On the requirements being met by the shareholder, the board may appoint a “special litigation committee” which may move to dismiss.
The famous case of Shaffer v. Heitner, which ultimately reached the United States Supreme Court, originated with a shareholder derivative suit against Greyhound Lines.
In the United Kingdom, an action brought by minority shareholder(s) could only in exceptional circumstances be upheld under the doctrine of Foss v Harbottle in 1843 as to who is the "proper claimant/plaintiff".
Thus highly irregular emoluments or share reward schemes to the board of directors themselves or their personal extrinsic interests lend themselves to such suits.
Sections 302 to 306 of the Companies Act 2006 provides no new statutory class of suits but must be followed, setting out the required standard procedure.
In Scotland where there had been even less clear rules on shareholder actions on behalf of the company, particularly procedurally, alike sections assist.
Many European countries have company acts that legally require a minimum share in order to bring a derivative suit.