Litigation Funding, Assignment of Actions and Access to Justice: SPV Osus v HSBC [2018] IESC 44

Date01 January 2019
Litigation Funding, Assignment of
ActionsandAccess to Justice:
SPV Osus v HSBC [2018] IESC 44
e costs of pursuing litigation in this country are frequently a direct barrier to
the ventilation and resolution of valid claims before our courts. In comparable
jurisdictions, the structural problems of prohibitively high costs and the attending
restrictive impact on access to justice are at least partially oset by the availability
of litigation funding, whereby a third party nances another’s litigation typically in
exchange for a share of the proceeds if successful.
e expansion of litigation funding across the globe has followed a path of
chequered development. e ancient doctrines of maintenance and champerty
historically sought to purify the administration of justice by prohibiting non-
parties from interfering in or proting from litigation. ese doctrines over time
gave rise to inconsistent judicial acceptance of litigation funding. Common law
courts have, however, been more united in their approach to, and universally more
suspicious of, outright assignments of ‘bare’ causes of action for consideration.
When compared to the mere funding of a plainti’s claim, such assignments are
considered to be innitely more oensive than maintenance or champerty because
the plainti in whom a lawful claim originally vested is entirely removed from the
litigation in place of an unconnected, prot-motivated assignee who has purchased
a contractual right to run the litigation. us, while most common law courts
have been willing to embrace liberalisation of litigation funding arrangements
as facilitative of access to justice, they have generally been slow to recognise the
validity of assignments of actions, unless those assignments are supported by
legitimate interests.
While the Irish courts have recently armed that both litigation funding and
assignment of actions remain barred by law, the Supreme Court has expressed
serious concern at the continuation of the status quo. In SPV Osus,1 Clarke CJ
entreated the legislature to give ‘urgent consideration’2 to the continued operation
of the barriers to litigation funding in the face of the unsatisfactory current
environment in which high costs increasingly impede the constitutional promise
of access to the courts and the right to litigate.3 Being ‘strongly of the view that
* LL.B. (Dubl.), Solicitor.
1 SPV Osus Limited v HSBC Institutional Trust Services (Ireland) Limited & ors [2018] IESC 44.
2 ibid [2.5] (Clarke CJ).
3 Article 40.3, Constitution of Ireland. See generally Gerard Hogan and others, Kelly: e Irish
Constitution (5th edn, Bloomsbury Professional 2018) 1729.
94  
it is necessary that some measures be taken to attempt to address this problem,’4
Clarke CJ vociferously reiterated the point he made in Persona5 that the courts may
be le with ‘no option’ but to intervene in the event that the legislature fails to
act, notwithstanding that unregulated change by the courts may be undesirable.6
McKechnie J similarly considered that ‘urgent reform is needed so that the right of
access to the courts can be rendered eective in a practical sense’.7
is note considers the lengthy legal context and factual background to SPV
Osus and follows with analysis of and commentary on the judgment for the
Court delivered by O’Donnell J and the concurring judgments of Clarke CJ and
McKechnie J in that case.
e Story So Far
Maintenance and Champerty
e prohibitions on maintenance and champerty proscribe litigation funding in
Ireland. Maintenance is the support (typically nancial) of litigation by a non-
party who does not have a ‘legitimate interest’ in that litigation. e full scope of
exceptions under the legitimate interest test is not exhaustively known, but some
examples disclosed by case law are considered below. Champerty is an aggravated
form of maintenance, in which litigation is funded in exchange for a share of the
proceeds of that litigation. Champerty has been described as ‘a secular form of
simony within the legal system’8 and is considered to be a form of abuse of process
which oends against public policy by stirring up litigation.
Maintenance and champerty were historically both torts and criminal oences at
common law and under statute. e earliest recorded statutes on maintenance and
champerty were enacted in medieval England,9 at a time when nobles frequently
abused their position to interfere in litigation and subvert the administration of
justice before edgling common law courts.10 ese early statutes were, however,
perceived as merely declaratory11 of the common law position already extant at
that time, which was itself apparently derived from legal principles prevailing in
Ancient Greece and Ancient Rome.12
4 SPV Osus (n 1) [2.2] (Clarke CJ).
5 Persona Digital Telephony Limited & anor v Ireland & ors [2017] IESC 27.
6 SPV Osus (n 1) [2.9] (Clarke CJ); Persona (n 5) [4.1] (Clarke J).
7 SPV Osus (n 1) [20] (McKechnie J).
8 Greenclean v Leahy [2014] IEHC 314 [10].
9 Statute of Westminster 1275 (3 Edw I, c 25, 28, and 33); Statute of Conspiracy (Maintenance and
Champerty) 1305. See Statute Law Revision Act 2007, s 6(c).
10 Nick Rowles-Davies and Jeremy Cousins, ird Party Litigation Funding (Oxford University Press
2014) 24.
11 Percy Henry Wineld, ‘e History of Maintenance and Champerty’ (1919) 35 Law uarterly
Review 50, 56.
12 Max Radin, ‘Maintenance by Champerty’ (1935) 24 California Law Review 48, 49.

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