Company law

Company law covers matters relating to the incorporation, ownership, governance, management and insolvency of companies (as opposed to the business affairs of those companies, which is better described as commercial law). Practitioners in this area typically work on matters relating to other business associations as well, such as partnerships and limited liability partnerships (LLPs).

A barrister may specialise almost entirely in company law or it may form part of a broader commercial or chancery practice.

A company law barrister's work

There are regular opportunities for junior barristers to get into court (particularly on short winding-up petitions) though this will not necessarily be the case throughout your career. Practitioners can expect to spend more time at their desks giving advice and preparing for future cases than actually fighting them out in court. When cases do go to court, however, they can be lengthy. For example, the trial of an unfair prejudice petition may last weeks or even months. Such cases involve one or more shareholders (typically minority members) alleging that the affairs of the company have been managed in a way that is unfair and prejudicial to their interests as members of the company. They tend to be fact-heavy cases where years of management decisions are picked through by the court and can take many months to prepare.

Company law barristers may also be required to give advice to companies even where no litigation is anticipated. For instance, a company may require assistance in relation to a takeover, a share issue or a scheme of arrangement.

The best part of the work is the interest and challenge it provides. A specialisation in company law is best suited to those who enjoy engaging with difficult legal issues. Companies are subject to a range of regulatory control beyond traditional company and insolvency law. Partnerships, LLPs and other entities all have their own rules. Practitioners also need to be familiar with most areas of private law (especially contracts, equity and trusts) and, increasingly, relevant aspects of European law.

Recent developments in company law

In Moore Stephens v. Stone Rolls Ltd, the House of Lords held (by a majority of three to two) that the fraud of a director and sole shareholder was attributable to the company. The individual in question had produced false records and accounts, which deceived the company’s auditors and allowed a fraud to be perpetrated against the company’s creditors. Accordingly, the liquidators of that company, standing in the shoes of the company, were barred from suing the auditors for negligence because it would have involved relying on the company’s own illegal behaviour.

In 2010, the Financial Reporting Council released a Stewardship Code and a new UK Corporate Governance Code. The former sets out guidelines and principles that aim to encourage institutional investors to take a more active and considered role in corporate governance (for example, by publishing their voting policy and voting history as shareholders of UK companies). The latter sets out revised governance standards for listed companies, including a requirement of a clear statement of the board’s risk management responsibilities and the need for board diversity.

More broadly, the implications of the Companies Act 2006 are still being worked out and many provisions have only been in force since late 2009.

Is company law recession-proof?

Company law is about as recession-proof as it gets at the Bar. While merger activity tends to decrease with a slowing economy, insolvency work abounds. There is nothing like the prospect of collapse to focus the minds of creditors and shareholders.

Skills company law barristers need

• Written and oral advocacy.
• Strong legal knowledge.
• An eye for detail.

Company law pupillages

Pupils will draft documents, conduct research and attend court hearings with their supervisors. In their second six, they may appear in court on winding-up petitions or other small matters, but there are fewer oral advocacy opportunities than there would be if practising general common law or criminal law.

Types of law practised

• Company.
• Insolvency.

Sam O’Leary is a barrister at One Essex Court where he practises in commercial and company law. He studied law at Oxford University and the University of New South Wales and was called to the Bar in 2007.