Supreme Court Rules Against Litigation Funding In Ireland In Persona

Author:Mr Peter Bredin, Kieran Cowhey, Laura Butler and Aidan Heffernan
Profession:Dillon Eustace

The Supreme Court has delivered its much anticipated judgment in Persona Digital Telephony Ltd and another v The Minister for Public Enterprise and others (Unreported, Denham J, Clarke J, MacMenamin J, Dunne J and McKechnie J, Supreme Court, 23 May 2017) and has ruled against litigation funding arrangements in Ireland. In a four to one ruling with, McKechnie J dissenting, the court held that the separation of powers prevailed and the court was reluctant to interfere with the government's power to legislate.

The case raised issues in relation to the torts and offences of maintenance and champerty and whether they were a bar to professional third party funding of litigation. The court examined whether an agreement to fund where there is no connection between the plaintiffs and the funder other than the decision to fund is contrary to law.

The Supreme Court dismissed the plaintiffs' appeal against the High Court's decision. The High Court had refused to grant an Order declaring that a litigation funding arrangement entered into by the Plaintiffs with a third party was not an abuse of process and/or not contravening the rules on maintenance and champerty.

In brief, Denham CJ stated that the rule against maintenance and champerty is still in force in this jurisdiction, and that the plaintiffs in the Persona proceedings had not come within any exceptions to the rule. She commented that she did not think that it made a difference whether the funding came before or during the proceedings.

Clarke J concurred with the Chief Justice's judgment, and stated that, while the courts cannot interfere with the existing laws in relation to maintenance and champerty on the basis of the doctrine of Separation of Powers, the courts could possibly act as a guardian of the constitution in the future in the event that the Government did not take any steps in relation to this issue.

Judge Dunne concurred with the Chief...

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