knowledge | 22 September 2016 |
Litigation Funding in Ireland: Now Before the Supreme Court
The prohibition on maintenance and champerty in Ireland has restricted non-party funding of litigation here. However, with the Supreme Court now set to consider for the first time the validity of a non-party funding arrangement, change may be imminent.
In April 2016, the High Court gave judgment in Persona.1 This was the first Irish decision directly addressing the validity of professional third party litigation funding in Ireland.
It was the latest ruling in the long-running litigation surrounding the grant of the second GSM mobile telephone licence to Esat Digifone Ltd in the 1990s. In 2001, Persona Digital Telephony Ltd and another party, who were runners-up in the competition for the licence, sued alleging irregularities in that competition.
However, the plaintiffs could not continue to fund the litigation and entered into an arrangement with a British professional funder who was prepared to do so in exchange for a share of the proceeds if the action succeeded. As maintenance and champerty remain both torts and criminal offences in Ireland, it was uncertain whether this arrangement was permissible.
The plaintiffs therefore sought a declaration that they were not contravening the law prohibiting maintenance and champerty. They were unsuccessful in the High Court.
This decision is now under appeal to the Supreme Court which, given the importance of the issues involved, has permitted a “leap-frog” appeal to that court, bypassing the Court of Appeal.2 The question which the court will consider is:
“Whether third party funding, provided during the course of proceedings (rather than at their outset) to support a plaintiff who is unable to progress a case of immense public importance, is unlawful by reason of the rules on maintenance and champerty.”
The decision of the Supreme Court is awaited with interest.
- Persona Digital Telephony Ltd v The Minister for Public Enterprise  IEHC 187
- Persona Digital Telephony Ltd v The Minister for Public Enterprise  IESCDET 106
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.