Sevilleja v Marex Financial Ltd [2020] UKSC 31 is a judicial decision of the Supreme Court of the United Kingdom relating to company law and the rule against reflective loss.

In particular the majority held that the subsequent decisions in Giles v Rhind [2003] Ch 618, Perry v Day [2004] EWHC 3372 and Gardner v Parker [2004] EWCA Civ 781 were all wrongly decided.

And in Garner v Parker [2004] EWCA Civ 781 Neuberger LJ had stated that it was hard to see why the rule against reflective loss should not also apply to creditors generally.

But, starting on or shortly after 19 July 2013, Mr Sevilleja procured that more than US$9.5m was transferred offshore from the Companies' accounts and placed under his personal control.

The object of the transfers (on the assumed facts) was to ensure that Marex did not receive payment of the amounts owed by the Companies.

In a long and densely written judgment, he summarised the history of the law relating to concurrent claims and the modern development of the rule against reflective loss in Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) [1982] Ch 204.

He then summarily dismissed the situation of creditors as being entirely different to shareholders (which was sufficient to deal with the main issue between the parties.

[19] He expressed his support for the majority, that the rule against reflective loss should continue (albeit in modified form) for shareholders, but not creditors.

It may well be, as Lord Sales reasons, that the law can achieve some protection of those interests by other means such as case management and equitable subrogation.

That judgment has stood for almost 39 years; it was upheld by the House of Lords in Johnson v Gore Wood & Co [2002] 2 AC 1; and it has been adopted in other common law countries.

In essence, Lord Sales (and the judges who joined with him) thought that the rule against reflective loss should simply be abolished entirely.

"[22] As a matter of principal he expressed the view that it was wrong for "a bright line rule to be introduced in the common law as a matter of policy to preclude what are otherwise, according to ordinary common law principles, valid causes of action"[23] and that the rule "gives undue priority to the interests of other shareholders and creditors of the company in circumstances where the claimant shareholder is not subject to any obligation to subordinate his interest in vindicating his personal rights to their interests"[24] The case was reviewed in the Modern Law Review by Jonathan Hardman, who broadly supported the decision but argued "the majority judgment did not go far enough.

"[25] Other commentators expressed greater sympathy with the minority position, but accepted that "for the time being at least, the doctrine of reflective loss lives to fight another day, but in truncated form.