The Supreme Court of
Ireland has ruled that the doctrines of champerty and maintenance prevented third
party litigation funders from financing litigation.
The ruling concerns a
non-competition case where Persona Digital Telephony and Sigma Wireless
Networks were suing the Business Minister after they lost a bid in a mobile
telephone auction.
The Supreme Court upheld
a ruling of the Irish High Court that the funding agreement with Harbour Capital
was unlawful. The Supreme Court
president found that the fund had no connection with the claimants other than the
funding arrangements. As such, it was a “champertous
agreement” which, in the absence of a statutory exception, was unlawful.
The judgment comes at a
time when claimants are considering antitrust litigation in a number of
jurisdictions. It remains to be seen
what effect the ruling will have on the attractiveness of Ireland as a venue
for such actions.
It might be said that the
ruling does no more than confirm the existing position on funding based on a
narrow construction of existing statutory provisions. In this respect it is noteworthy that the
president gave a nod to the need for legislation on the matter noting that such
a complex and multi-faceted issue was “more suited to a legislative analysis”.
Persona
Digital Telephony Limited & Sigma Wireless Networks Limited v The Minister
for Public Enterprise, Ireland and the Attorney General [2017]
IESC 27
