Franbar Holdings Ltd v Patel [2008] EWHC 1534 (Ch)

Relevant test under s. 263(3)(b) is that of a hypothetical director.

• i.e. if such a person would not attach very much importance to pursuing claim, no leave granted.

Factors which hypothetical director would take into account include:

1. Likelihood of claim being successful

   • i.e. if breaches of duty not obvious, would not bring claim

2. Ability of company to recover any damages awarded

3. Costs of proceedings

4. Damage to company’s reputation

Fact that Claimant had alternative claim for unfair prejudice considered important to exercise of discretion under s.263(3)