10 December 2009

ASIC v Rich - the business judgment rule

Authors: John Keeves

Much ink has already been spilt as a result of ASIC’s case against Jodee Rich, resulting in a 3000+ page judgment. In this update we consider Justice Austin’s important observations in Chapter 23 on the duty of care and diligence and the business judgment rule (BJR). Key points include: the BJR has work to do, and goes beyond the related general law principles; and the BJR requirement for a 'rational' belief does not impose an objective reasonableness standard – a rational decision is one that is supported by a process of reasoning, rather than the decision that the hypothetical reasonable person would necessarily reach.

Download: ASIC v Rich (54 Kb)

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