(a) Prerequisites. This rule applies when one or more shareholders or members of a corporation or an unincorporated association bring a derivative action to enforce a right that the corporation or association may properly assert but has failed to enforce. The derivative action may not be maintained if it appears that the plaintiff does not fairly and adequately represent the interests of shareholders or members who are similarly situated in enforcing the right of the corporation or association.
Rule 23.1.Derivative actions
Current through January 1, 2025 · Last verified July 8, 2026
In one sentenceRule 23.1 lets a shareholder or member sue on behalf of a corporation or unincorporated association to enforce a right the entity has failed to enforce itself, but requires the plaintiff to have held that status when the dispute arose, to plead their pre-suit demand efforts with particularity, and to get court approval before settling, dismissing, or compromising the case.
Full Text of Rule 23.1
(b) Pleading requirements. The complaint shall be verified and shall:
(1) allege that the plaintiff was a shareholder or member at the time of the transaction complained of, or that the plaintiff's share or membership later devolved on it by operation of law;
(2) state with particularity:
(A) any effort by the plaintiff to obtain the desired action from the directors or comparable authority and, if necessary, from the shareholders or members; and
(B) the reasons for not obtaining the action or not making the effort.
(c) Settlement, dismissal and compromise. A derivative action may be settled, voluntarily dismissed, or compromised only with the court's approval. Notice of a proposed settlement, voluntary dismissal or compromise shall be given to shareholders or members in the manner that the court orders.
Amendment History
The current West Virginia Rules of Civil Procedure took effect January 1, 2025, as part of a rewrite that modernized the rules’ numbering and structure. West Virginia does not publish a per-rule amendment history inside the compiled rules text reproduced here. The text above is verified current through the source’s own January 1, 2025 update; for the underlying adopting order and any later amendments, see the West Virginia Judiciary’s compiled rules page.
Plain-English Summary
Normally a corporation sues to protect its own rights. A derivative action is the exception: it lets a shareholder or member step in and sue on the corporation's or association's behalf when the entity itself won't enforce a right it could properly assert.
To bring one, the plaintiff has to have been a shareholder or member at the time of the transaction being complained of (or have acquired that status later by operation of law), and can't proceed if they wouldn't adequately represent similarly situated shareholders or members. The complaint has to be verified, and it has to describe with particularity what the plaintiff did to get the directors — and if necessary, the shareholders or members — to take action themselves, or explain why that effort wasn't made.
Because a derivative action is brought on behalf of others who aren't in court, it can't be settled, dismissed, or compromised without the court's approval, and shareholders or members have to be notified in whatever manner the court directs.
Frequently Asked Questions
What is a derivative action?
A lawsuit brought by a shareholder or member on behalf of a corporation or unincorporated association to enforce a right the entity itself has failed to enforce.
What has to be in the complaint before a court will let a derivative action proceed?
A verified complaint stating that the plaintiff was a shareholder or member when the disputed transaction occurred, plus particular details about what effort the plaintiff made to get the directors or shareholders to act — or why that effort wasn't made.
Can a derivative action be settled without court involvement?
No. Rule 23.1(c) requires court approval before a derivative action can be settled, voluntarily dismissed, or compromised, along with notice to shareholders or members as the court directs.
Source & verification. The rule text is reproduced verbatim from the
official West Virginia Rules of Civil Procedure (W. Va. R. Civ. P. 23.1). Prescribed by the Supreme Court of Appeals of West Virginia (W. Va. Const. art. VIII, § 3). The plain-English summary is original and written by us. Last verified July 8, 2026. ·
Official source
Also known as: shareholder derivative suitderivative action requirements