Funding of litigation by non-parties has been the subject of a
recent High Court decision, which is now under appeal. Will the
Supreme Court align Ireland with other common law jurisdictions and
depart from the position that has been in place since the
Maintenance and champerty have been, and remain, criminal and
civil wrongs in Ireland.
Maintenance is the funding of litigation by a non-party who has
no legitimate interest in the proceedings. Champerty, however, goes
one step further and involves that non-party receiving a share in
the proceeds of the litigation.
The prohibition on both maintenance and champerty is founded in
the public interest. It seeks to ensure the integrity of the
litigation process and exclude those with no legitimate interest
from the process.
Persona Digital Telephony Ltd v the Minister for Public
This was the first case in the Irish Courts to really consider
professional third-party litigation funding. The court was
reluctant to depart from the long standing position and reaffirmed
that maintenance and champerty are prohibited.
The court did however note that a decision of an appellate court
might be required to consider whether a move from the traditional
position was warranted in light of prevailing public policy
The case related to the award of mobile phone licences by the
Irish state in 1996. That process subsequently became the subject
of the Moriarty Tribunal, which was heard over the course of 11
The work around
Where the third party has a lawful or legitimate interest in the
proceedings their funding of the litigation will not fall foul of
the rules. Classic examples include shareholders funding litigation
in which the company is a party.
The High Court expressly noted in Persona that it could
not deal with the constitutionality of the rules on maintenance and
champerty and their interplay with the question of access to
justice. The question remains as to whether there will be
legislative change in this space.
The Persona appeal will be heard by the Supreme Court. The case
has effectively 'leap frogged' the Court of Appeal. In
allowing this the Supreme Court recognised the public importance of
the matter. Persona is one of only a handful of cases to
successfully 'leap frog' the Court of Appeal since its
inception in 2014.
Third party funding of litigation in England and Australia is
now permitted. It is not unusual for Ireland to follow developments
in these, and other common law jurisdictions, some number of years
later.This issue is very much a case of "watch this
In 2015 After The Event insurance was found not to be contrary
to the rules of maintenance and champerty. If the Supreme Court in
Persona moves away from the long established position a
whole new market will emerge in Ireland for parties seeking to fund
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The UK Supreme Court last week issued the latest decision in a long-running attempt to enforce a US$150 million Nigerian arbitration award (IPCO (Nigeria) Limited v. Nigerian National Petroleum Corporation...
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).