Can a shareholder sue for damages arising from the diminution in value of his or her shares?

While the rule in Foss v. Harbottle prevents a shareholder from suing for any type of damage resulting from a wrong done to the corporation, it is frequently invoked when a shareholder attempts to recover for the diminution in value of his or her shares. Such claims offend the rule because a wrong done to the corporation that results in diminished share value does not ground a personal cause of action for the shareholder. The party with the cause of action for the wrong is the corporation. The loss in share value is simply reflective of the loss incurred by the corporation as a result of the wrong done to it, and would be remedied if the corporation took action to recover its loss from the wrongdoer. Both the wording of the rule, and its rationale, apply to bar such claims: Meditrust, at para. 42. (b) The limit of the rule