Irish Supreme Court rules on litigation funding ban

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