LEGAL PRINCIPLE: LABOUR LAW — Rule in Foss v. Harbottle and Contractual Exceptions
PRINCIPLE STATEMENT
A contractual right in a union constitution permitting individual members to sue for constitutional breaches operates as an exception to the rule in Foss v. Harbottle, with both principles being complementary rather than conflicting.
RATIO DECIDENDI (SOURCE)
"I do not see the relationship between the rule in Foss v. Harbottle and the right provided by Rule 7(v) as one of conflict; or the rule being overruled by the right. I think they are complementary one to the other. This must be so because the right to be exercised under Rule 7(v) only arises in case of a breach of the Constitution, and where also the individual is prepared to foot the bill of the litigation. In other cases, the rule in Foss v. Harbottle will apply unheeded. It is therefore per se really an exception to the general rule in Foss v. Harbottle."
EXPLANATION / SCOPE
This principle harmonizes common law standing restrictions with contractually created rights. Rather than viewing the contractual right as overriding or abolishing the rule in Foss v. Harbottle, it operates within a defined sphere as a recognized exception. The general rule prohibiting individual members from suing for corporate wrongs remains applicable in most circumstances, but yields when: (1) the union constitution expressly confers individual standing, (2) the claim involves breach of the constitution itself, and (3) the individual bears personal responsibility for litigation costs. This framework preserves the policy objectives of the Foss v. Harbottle rule (preventing multiplicity of suits, protecting corporate autonomy) while accommodating legitimate individual interests in specific constitutional matters. The complementary relationship ensures both principles function within their appropriate spheres without creating legal conflict.