Enforcement

Abstract

This chapter explores whether the lower level of investor protection that some commentators associate with the civil law can be explained with deficiencies in the enforcement mechanisms that investors, and in particular minority shareholders, have at their disposal. It starts with a discussion of the so-called ‘contracwetualisation of responsibility’. It then analyses how the claims that a company has against its own directors can be enforced, in particular, by minority shareholders. The last part of the chapter gives an overview of substitute enforcement mechanisms for the minority shareholder lawsuit that are of great practical importance in some jurisdictions. In contrast to litigation by the company (acting through its authorized organ or minority shareholders), these substitute mechanisms are predominantly of a public law nature. Thus, this final section will illustrate how some legal systems have a preference for public enforcement, while others rely extensively on private enforcement.