Third party litigation funding in Ireland is unlawful under maintenance and champerty rules unless specific exceptions apply.

THE SUPREME COURT

Appeal No. 72/2016

Denham C.J.

McKechnie J.

Clarke J.

MacMenamin J.

Dunne J.

Between/

Persona Digital Telephony Ltd., and Sigma Wireless Networks Ltd.

Plaintiffs/Appellants

and

The Minister for Public Enterprise, Ireland, and the Attorney General,

and by order Denis O’Brien

Defendants/Respondents

and

Michael Lowry

Third Party

Judgment delivered the 23rd day of May, 2017, by Denham C.J.

Introduction

1. This appeal raises issues in relation to the torts and offences of maintenance and champerty, and to professional third party

funding of litigation.

2. Persona Digital Telephony Ltd and Sigma Wireless Networks Ltd., the plaintiffs and appellants in the proceedings, are referred to

collectively as “the plaintiffs”.

3. The Minister for Public Enterprise, Ireland, the Attorney General and Denis O’Brien are the defendants and respondents in the

proceedings, and are referred to collectively as “the defendants”. The first three defendants are referred to as “the State”. The

fourth named defendant is referred to as “the fourth named defendant”.

4. Michael Lowry, the third party, is referred to as “the third party”.

5. The plaintiffs brought a notice of motion, dated the 25th March, 2015, to the High Court, seeking:-

“An Order, by way of a Declaration or otherwise, pursuant to the inherent jurisdiction of this Honourable Court and/or

Order 34 of the Rules of the Superior Courts, that in entering into this litigation funding arrangement with Harbour Fund

III, L.P., the plaintiffs are not engaging in an abuse of process and/or are not contraversing rules on maintenance and

champerty”.

Funding Agreement

6. The directors of the plaintiffs consider that the plaintiffs have or may have a cause or causes of legal action against the

defendants. The directors of the plaintiffs decided that it was in the best interests of the plaintiffs to enter into an investment

agreement with Harbour Fund III, LP, an exempted limited partnership under the laws of the Cayman Islands, referred to as “HF3”, in

order to provide financial backing for the plaintiffs’ legal costs and disbursements that would be incurred by the plaintiffs in the

proceedings, including for the purchase of the plaintiffs’ adverse costs insurance, and to otherwise protect the assets of the plaintiffs

against any adverse costs order made in or relating to any such proceedings. It was a condition of the agreement that the parties

enter into a security agreement that was satisfactory to HF3. The agreement was entered into on the 25th March, 2015, between

HF3, the plaintiffs, Tony Boyle and Michael McGinley. I shall return to further detail this agreement later in the judgment.

7. This is the first case to come before the Court which raises the issue of the potential use of a third party professional funding

agreement to support a party in legal proceedings.

8. Inter alia, the plaintiffs contended that the third party funding scheme should be considered in context, and that the question

should be asked whether, on the whole, the transaction amounts to unlawful maintenance or champerty, or whether it should be

viewed as enabling a claim of public importance to proceed and to ensure the constitutional guarantee of access to justice.

9. The State submitted that maintenance and champerty are criminal offences as well as torts, being common law offences which

have had statutory recognition for hundreds of years. The State relied on the Maintenance and Embracery Act 1634, “the Act of

1634”, which was retained by the Statute Law Revision Act, 2007. The State submitted that the torts of maintenance and champerty

are still extant, and that the courts have defined maintenance and champerty in terms which encompass the funding agreement at

issue in this case. The State submitted that the funding agreement was void for illegality, and that the plaintiffs were asking the

Court to vary the scope of the offences and torts of maintenance and champerty, which was not within the jurisdiction of the Court.

The High Court

10. The High Court (Donnelly J.) delivered judgment on the 20th April, 2016, stating, in conclusion:-

“86. It is important to recall that, the application before the Court is not a constitutional challenge; the Court has not been asked to

examine the constitutionality of the offences and torts of maintenance and champerty and no declaration of unconstitutionality has

been sought. The resolution of any issues regarding constitutional rights, including access to justice or indeed whether these ancient

torts and offences are truly “in accordance with law” awaits any such constitutional challenge. On the basis of the relief claimed in

the notice of motion, and in circumstances where the Court is of the view that the ingredients of the offences (and also the torts) of

maintenance and champerty have been stated clearly by the Superior Courts of Ireland to prohibit professional third party funding,

there are no grounds for entering into an examination of whether the interpretation given to the torts and offences is in accordance

with the Constitution.

87. In conclusion, maintenance and champerty continue to be torts and offences in this jurisdiction. From the Irish authorities

abovementioned, there is a prohibition on an entity funding litigation in which it has no independent or bona fides interest, for a share

of the profits. It is the view of this Court that Harbour III L.P., as a professional third party litigation funder, has no independent

interest in this present litigation. Furthermore, it is clear that third party funding arrangements cannot be viewed as being consistent

with public policy in this jurisdiction or that modern ideas of propriety in litigation have expanded to such an extent to afford this

Court the opportunity to characterise this funding arrangement as acceptable. While the plaintiff has pressed upon this Court that

there is a lack of clarity in this regard, that submission is not accepted in view of the consistent line of authorities to the contrary.”

11. Thus, the High Court, on the 12th May, 2016, ordered that the reliefs sought by the plaintiffs be refused.

Determination

12. The plaintiffs applied to this Court for leave to appeal directly from the High Court, a “leapfrog appeal”. On the 25th July, 2016, by

Determination [2016] IESCDET 106, leave was granted. This Court granted leave to appeal on the issue of whether third party funding

is unlawful by reason of the rules of maintenance and/or champerty. The issues upon which leave was given was stated as:-

“Whether third party funding, provided during the course of proceedings (rather than at their outset) to support a plaintiff

who is unable to progress a case of immense public importance, is unlawful by reason of the rules on maintenance and

champerty”.

Submissions

13. Separate written submissions were filed on behalf of the plaintiffs, the State defendants, the fourth named defendant, and the

third party. In addition, oral submissions were heard by the Court from counsel on behalf of the parties.

Submissions on behalf of the Parties

14.(i) Mr. Michael Collins S.C. made impressive oral submissions on behalf of the plaintiffs which included the following points. He made

six preliminary observations. First he pointed out that this Court has certified a particular issue in terms of whether the third party

funding agreement in this case is unlawful by reason of the doctrines of maintenance and champerty, thus it is fact specific. Second,

he argued, that there was no statutory provision which deals with third party funding. Third, and contrary to the submissions of the

defendants, he submitted that there is no Irish decision which has decided the issue of whether third party funding is unlawful as

contrary to maintenance and champerty. Fourth, he submitted that the existing Irish case law does not describe maintenance and

champerty in terms of a per se prohibition on an agreement which involves a share in the proceeds of the litigation itself. He argued

that the mere giving of assistance in return for a share in the proceeds is not champertous. Fifth, he submitted that the plaintiffs

were not inviting the Court to abolish the doctrines of maintenance and champerty, but rather asking the Court to analyse the

content of maintenance and champerty and to determine whether the present funding agreement is likely to bring about the mischief

that maintenance and champerty are designed to protect. Sixth, he submitted that the plaintiffs were inviting the Court to do what it

always does when faced with the application of a common law principle to a new factual situation. He asked the Court to develop and

clarify a principle of the common law, not to abolish a tort or invent new law.

14. (ii) Counsel addressed the public policy engaged, being the protection of the integrity of the administration of justice. He referred

to case law. He considered the situation, where there are some conflicting views, that even if it is a champertous agreement, the

proceedings could still go on if the funder agreed to fund, with the risk that at the end of the day the agreement could be held to be

unenforceable.

14. (iii) Counsel addressed the issue of whether champerty operates as a per se prohibition on third party funding. (The State argued

that the prohibition on third party funding is per se a rule). He argued that the various descriptions of maintenance, and champerty,

are nothing more than specific fact examples identified by courts over the years, that they are not an exhaustive definition, and are

not a statutory definition. He argued that there is no statute which states that third party funding is illegal per se. He submitted that

the statutes are merely declaratory of the common law. He said that in other jurisdictions the courts have not approached the

manner as a per se prohibition, but that they have examined the common law rule by reference to the public policy related to the

administration of justice, and not as the State submits on this appeal. He pointed out that public policy changes. Counsel argued that

it would be incorrect to regard it as a per se prohibition. Such an approach was wrong as it meant a failure to consider and analyse

the public policy interests, including entitlement of access to the court and freedom to contract. He submitted that the appropriate

approach is to identify some particular harm flowing to the administration of justice from the particular agreement. References were

made to case law. Counsel stressed that the appropriate approach for the Court to take was not to consider that it is a per se

prohibition, but that the references to maintenance and champerty are mere descriptions of circumstances which can give rise to the

public policy issue. On this approach the Court would then identify the public interest factors, and weigh them up. He argued that if

the Court took this approach then all the weighing goes in favour of the enforcement of the agreement. He stated that this did not

mean that every third party funding agreement would be valid, but he argued that this one is.

14. (iv) Counsel submitted that when one looked at the third party funding agreement in this case, with its features, it does not

present objectionable features. He submitted that this third party agreement has not stirred up litigation, that the third party

agreement has come to the case after the litigation had commenced. He referred to the description of the agreement in the affidavit

of Susan Dunne. He argued that the agreement facilitated and vindicated the plaintiffs’ constitutional right of access to the Court. He

argued that the control of the litigation remained with the plaintiffs and the legal team. He referred to cases from other jurisdictions.

Counsel submitted that the terms of the agreement in this case were in accordance with the Code of Conduct for Litigation Funders in

the United Kingdom. He identified features such as that the funder is entitled to information , but cannot interfere with the litigation,

that the choice of solicitors and counsel, and any change, is for the plaintiffs. He submitted that decisions such as whether to

prosecute or settle are within the exclusive control of the plaintiffs. Counsel submitted that the standing of HF3 is a factor, and

reference was made to the affidavit of Susan Dunne, and to her words, including that HF3:-

“… is the most experienced litigation funder in the UK having reviewed over 1,900 cases since its inception in 2007. As

well as cases in the UK, HF2 and its predecessor fund, HF1, have funded litigation and arbitration disputes in numerous

jurisdictions including Jersey, Australia, Bermuda, the British Virgin Islands, Canada, Hong Kong, New Zealand and the

USA.”

14.(v) Counsel made submissions on what he identified as relevant foreign authorities. He argued that they are of use as there are so

few relevant cases in Ireland. He pointed out that this Court frequently looks at the jurisprudence of other common law jurisdictions.

He referred to New Zealand, where the torts of maintenance and champerty were not abolished by Statute but still remain. See

Saunders v. Houghton [2010] 3 NZLR 331. In that case two shareholders issued proceedings in a representative capacity using the

services of a litigation funder. Counsel referred the Court to paragraphs:-

“69. It is therefore arguable that, since Parliament has acknowledged the continuing existence of the common law torts of

champerty and maintenance, the courts should leave any adjustment of the law to the legislature. We have noted that in

2001 the Law Commission recommended that the common law be left unchanged.

70. The competing argument is that the common law elsewhere has moved on since 2001 and to disregard its evolution

would abdicate this court’s responsibility for incremental refashioning of the common law of New Zealand in spheres where

it has particular experience.”

He commended this approach to the Court.

The Court was brought also to McIntyre Estate v. Ontario (Attorney General) [2002] O.J. No. 3417. In Ontario the crimes of

champerty and maintenance were abolished in 1954 but they remain as torts on proof of special damage. Particular attention is given

to the issue of motive. Counsel quoted from para. 27:-

“The courts have made clear that a person’s motive is a proper consideration and, indeed, determinative of the question

whether conduct or an arrangement constitutes maintenance or champerty. It is only when a person has an improper

motive, which motive may include, but is not limited to “officious intermeddling” or “stirring up strife”, that a person will be

found to be a maintainer.”

Counsel made the submission that in the appeal before this Court there is no improper motive and that HF3 is a reputable funder.

14. (vi) Counsel referred to Ireland’s place on the international stage, and pointed to the International Financial Services Centre as an

example. He referred to the Arbitration Act, 2010 as a legislative example, which is modelled on the UNCITRAL model law, and also to

our place within international trade. He then looked at the European Commission’s recommendations on third party funding for

collective redress actions, where the European Economic & Social Committee have recommended third party funding in that context.

14. (vii) Counsel addressed constitutional issues of access to justice and freedom of contract. The Court was referred to case law,

including O’Keeffe v. Scales [1998] 1 I.R. 290, where at p. 295, Lynch J. said:-

“While the law relating to maintenance and champerty therefore undoubtedly still subsists in this jurisdiction, it must not

be extended in such a way as to deprive people of their constitutional right of access to the courts to litigate reasonably

stateable claims.”

Counsel stressed that maintenance and champerty should not be invoked if one could not identify a specific harm. Counsel addressed

the issue of freedom of contract. Reference was made to Quinn v. IBRC [2015] IESC 29, which reviewed jurisprudence from other

jurisdictions as to the illegality of contracts, and the public policy that requires courts to refrain from enforcing contracts tainted by

illegality. The Court was brought also to Patel v. Mirza [2016] UKSC 42. This included the statement from Lord Neuberger at para.

183:-

“When considering how to characterise, or whether to develop, any fundamental principle of the common law, it is

normally sensible for a judge to consider how the principle has been approached in other common law jurisdictions, and it

is desirable, if not always achievable, that all common law jurisdictions adopt the same approach.”

14. (viii) Counsel addressed the issue of the function and responsibility of the Court in the evolution of the common law. Counsel

brought the Court to Rodriguez v. Speyer Brothers [1919] A.C. 59, where Lord Haldane said:-

“I think that the change in the view taken of the law as to covenants in restraint of trade, and the illustration it affords

of the fashion in which decisions which were right in their time may cease to be of valid application, are highly instructive.

For they show that between the class of cases in which, as in the instance of the rule against perpetuities, the law,

although originally based on public policy, has become so crystallised that only a statute can alter it, and the different

class, such as that of the cases relating to wagers, in which the principle of public policy has never crystallised into a

definite or exhaustive set of propositions, there lies an intermediate class. Under this third category fall the instances in

which public policy has partially precipitated itself into recognised rules which belong to law properly so called, but where

these rules have remained subject to the moulding influence of the real reasons of public policy from which they

proceeded.”

[emphasis added].

In Giles v. Thompson [1994] 1 AC 142, as counsel pointed out, Lord Steyn suggested that maintenance and champerty might be

within that third category.

Counsel submitted that it was part of the function of the Court in evaluating a common law doctrine to look at it in modern

circumstances and modern times. Further, counsel referred to the words of Clarke J. in Thema International Fund plc v. HSBC

Institutional Trust Services (Ireland) [2011] 3 I.R. 654.

14.(ix) Finally, counsel turned to the matter of the ancient statutes, to statutes of the 1300s and 1600s, which have been retained

by the Act of 2007. He stressed that the statutes have always been treated as simply declaratory of the common law. Thus, it is a

matter, he submitted, of interpreting the common law and its boundaries. He argued that the statutes were difficult to understand.

They use ancient language and are merely descriptive of maintenance and champerty, and they give some examples of things

recognised as evils at that time. Counsel stated that the Act of 2007 repealed 3,226 Acts. He argued for the position that the

maintenance and champerty statutes were retained as an exercise in caution. He submitted that the Court could not draw an

absolute prohibition from the mere retention of ancient statutes.

14 (x) The plaintiffs sought approval for the funding in the particular circumstances, where the funding is provided after the

proceedings have commenced; where it is submitted that the case cannot continue without funding; where there is a high public

interest in the proceedings advancing to trial. HF3 was submitted to be a reputable funder, which funds cases in many jurisdictions,

and where, it was submitted, there is no credible basis to believe that its involvement as a funder would undermine the administration

of justice. It was submitted also that by permitting the plaintiffs to avail of the funding, access to and the administration of justice

would be positively enhanced.

15. (i) Mr. John O’Donnell S.C. made submissions on behalf of the State. Inter alia, he stated that maintenance and champerty are, as

a matter of statute, still criminal offences in Ireland, and that they are also torts. Further that their status of statutory offences has

been re-affirmed in the Act of 2007. The decision to pass the Act of 2007 was a deliberate legislative decision to retain the

legislation. He submitted that the Law Reform Commission had not recommended the amendment or abolition of the rule against

maintenance or champerty, and has not recommended the introduction of professional third party funding.

15. (ii) Counsel submitted that the law was clear. Reference was made to Fraser v. Buckle [1994] 1 I.R.1, and to Costello J.’s words

of description at p. 13. It was submitted that the description covered a third party professional funder; that the funder got a share of

the proceeds in consideration of a promise to fund.

15. (iii) Counsel brought the Court to several cases on the law of champertious agreements. This included, for example, In re Trepca

Mines Ltd (No. 2) (1963) Ch. 199 and Lord Denning’s statement; and the dicta of Lynch J. in O’Keeffe v. Scales [1998] 1 I.R. 290.

15. (iv) Counsel submitted that because there has been a policy decision to retain the restriction or prohibition, then, as a matter of

policy, that the legislative decision should and can only be changed by the passing of legislation. Further, counsel pointed out that

the plaintiffs had not mounted a constitutional challenge. Counsel argued that if third party funding is to be permitted by the Court it

would in effect be a form of judicial legislation.

15. (v) Counsel accepted that there are certain exceptions where third parties may participate in the funding of litigation, such as

people with a common interest, Martell v. Consett Iron Co. Ltd. [1955] Ch 363. The legitimacy of the interest would become a matter

for the Court to consider. Counsel submitted that there cannot be a legitimate interest simply by being a funder. The fact that this is

a significant case, counsel submitted, is not an allowable exception to the rule against maintenance and champerty.

15. (vi) Counsel argued that the Court should not be seduced into changing the law. He quoted from MR v. An t-Ard Chláraitheoir

[2014] IESC 60, where Hardiman J. stated:

“11. It is plainly necessary for any Common Law judge confronted with the (often very seductive) temptation to change

the law in the interests of what he or she perceives to be justice, to be very clear as to the legitimate scope of a judge’s

ability to do so.”

15. (vii) Counsel argued that if the plaintiffs’ were not successful in this application that there were alternatives open to them, such

as someone might do the case for less than the €10 million mentioned, or that someone might do the case on a no foal no fee basis.

15. (viii) Counsel submitted that if the Court gave pre-clearance to this agreement, it would be asked to clear other agreements.

15. (ix) Counsel for the State pointed out that the motion at issue seeks a pre-clearance of the funding agreement, but that it was

accepted that the State had not tried to stop the proceedings even if the motion is denied.

15. (x) As to the issue on which leave to appeal was granted, counsel pointed out that it is not addressed to a specific fund or funder

or funding agreement, it is a principle. Counsel submitted that the time the funding is made available has not been advanced as a

specific ground, and that as a matter of principle there is no distinction arising from the time it commences. Indeed, he submitted, to

allow funders to intervene mid-case may be even less desirable because it may leave a plaintiff who has run out of money even more

vulnerable.

15. (xi) Counsel addressed the issue of other common law jurisdictions. Counsel submitted that in other common law jurisdictions

either the crimes of maintenance and champerty have been abolished or the torts of maintenance and champerty have been

abolished. Further, that the change in other jurisdictions has been brought about by statute, for example the Criminal Law Act, 1967,

in the United Kingdom, and the Maintenance, Champerty and Barratry Abolition Act, 1993 in Australia. In South Africa the Contingency

Fees Act 1997 permitted contingency fees. Hong Kong, he argued, is a separate situation. There maintenance and champerty remain

as torts and crimes. He referred to Unruh v. Seeberger [2007] HKCFA 9. He pointed out that references were made to situations

where a champertous agreement made in England is valid, if it relates to litigation in another country where champerty is lawful. The

policy was to protect the integrity of the English judicial system. Ribeiro P.J. stated:-

“… The Hong Kong court should not strike down an agreement on the grounds of maintenance or champertious where it is

to be performed in relation to judicial or arbitral proceedings in a jurisdiction where no such public policy objections exist.

I leave open the question whether maintenance and champerty apply to agreements concerning arbitrations taking place

in Hong Kong since it does not arise in the present case.”

Counsel pointed out that that is the issue in this case. Champerty remained a crime in Hong Kong Winnie Lo v. HKSAR [2012] HKCFA

23. The issue was referred to their Law Reform Commission, which looked at it in the context of arbitration.

15. (xii) Counsel made submissions in relation to Thema International Fund plc v. HSBC Institutional Trust Services (Ireland) Limited

[2011] IEHC 357; [2011] 3 I.R. 654. He submitted that Clarke J. in that case was not examining specifically the issue of third party

funding, and that the statements were obiter. These statements are opened later in the judgment. Reference was made also to

statements as to maintenance and champerty in SPV Osus Ltd v. HSBC International Trust Services (Ireland) Ltd [2015] IEHC 602;

SPV Optimal Osus Limited –v- HSBC Institutional Trust Services (Ireland) Limited & Ors [2017] IECA 56.

15. (xiii) Counsel for the State submitted that the intention and purpose of the statutes is to stop people funding litigation..

15. (xiv) As to freedom of contract, counsel argued that not every contract that is made between parties is enforced, he gave as

examples a contract to commit a crime; and a gambling contract: Sporting Index v. O’ Shea [2015] IEHC 407.

15. (xv) As to the right of access to the courts, counsel argued that this is not an absolute right, reference was made to the Statute

of Limitations.

15. (xvi) Counsel concluded by stressing that champerty is a crime as well as a tort. That the provision of funding would be active

assistance to the litigation.

16. (i) The Court heard oral submissions from Mr. Paul O’Higgins, S.C., for the fourth named defendant. Counsel adopted the

submissions of counsel for the State.

16. (ii) Counsel stated that the position of the fourth named defendant was that there is a prohibition on third party funding litigation

in which the funder has no independent or bona fides interest for a share of the profits. As HF3, a professional third party litigation

funder, has no independent interest in the litigation, the plaintiffs are not entitled to the reliefs sought.

16. (iii) Counsel brought the Court to the Statute Law Revision Act, 2007, and to case law, including McElroy v. Flynn [1991] ILRM

294, Fraser v. Buckle [1994] 1 I.R. 1, Rees v. De Bernardy [1896] 2 Ch 437, Giles v. Thompson [1993] 3 All ER 321, Greenclean (No.

2) [2014] IEHC 314, Trendtex Trading Corporation v. Credit Suisse [1980] Q.B. 629 (C.A.), [1982] AC 679 (H.L.). Counsel submitted

that neither the issue of whether the case was one of public importance, or the timing of the intervention by the funder, makes any

difference.

16. (iv) In counsel’s written submission he concluded that: (i) the rules of champerty and maintenance remain part of Irish law and

enjoy a practical vibrancy; (ii) the Courts have recognised the need to interpret those rules in line with constitutional and other legal

requirements; (iii) in doing so, the Courts have held that third party funding of litigation in exchange for a share of the proceeds is

unlawful, absent a lawful or legitimate interest on the part of the third party funder; (iv) even the most liberal decision on public

policy, Greenclean (No. 2), recognised that trafficking in litigation is unlawful; (v) foreign authorities must be treated with caution and

are of limited use to the Court; (vi) the third party funder in this case has no lawful or legitimate interest in the litigation and simply

seeks to invest in it for a very significant share of the proceeds; (vii) accordingly, the funding agreement is unlawful.

17. (i) The third party was represented by Niall Buckley, B.L., who made oral submissions. Counsel adopted the submissions of the

defendants.

17. (ii) First, in his oral submissions, he rejected the obsolescence argument, and said that there were a series of Irish cases in the

last quarter century which recognised a continued vibrancy.

17. (iii) Secondly, he addressed the need for something extra; an argument advanced by Mr. Collins S.C., that one needs to identify

something beyond the mere share in the proceeds which has some corrosive effect on the administration of justice. He said that the

per se theory has it that the Court is engaged in some mechanistic legal formalism, but argued that that is not what the Irish

authorities reflect. He argued that there are three elements when one is considering champerty: (i) external financial aid or other

assistance, (ii) a share of the proceeds, and (iii) no bona fide independent interest for partaking in the litigation. He argued that the

third element allows for considerable nuance and rebuts the argument of a mechanistic approach to access to justice.

17. (iv) He addressed the argument of the plaintiffs that this is a fact specific analysis for the Court. He submitted that such an

approach would be ruinous of legal certainty and advocates a quite impractical approach. Such an approach would draw the Court

into some kind of pre-clearance role for litigation finance.

17. (v) The plaintiffs had submitted that their funding agreement is not stirring up litigation. Counsel made the point that this litigation

agreement application coincides with a revival of the proceedings, and a change in the legal representation, which indicates an impact

on the litigation. Also, he submitted that it would be naïve to think that prospectively the ushering in of a litigation finance landscape

would not have precisely the effect of stirring up litigation. He referred to empirical data from Australia which indicates such an

effect. He argued that if one ushers in litigation finance, it is likely to involve a greater pool of money going into litigation from

external sources.

17. (vi) Counsel referred to the differing motivations which bring an investor to litigation. He argued that these are corrosive of the

administration of justice. He pointed out that there is no recognised fiduciary relationship involving a funder. Their entitlement to

access to advices, and to participate at meetings, raise problematic issues around privilege, and around access to material discovered

under implied undertakings. He argued that there has to be a risk that by decoupling plaintiffs from obligations in respect of the costs

of pursuing litigation and their costs exposure, there is a risk of a growth in unmeritorious claims and an increased prevalence in

oppressive litigation strategies. He said that there would be an inhibition to settlement, as a plaintiff would be compelled to take

account of the funder’s costs.

17. (vii) As to the access to justice argument, he submitted that the proposal is no substitute for legal aid. The plaintiffs’ argument is

effectively to change rules that have prevailed for several hundred years and are underpinned by sound public policy reasons.

17. (viii) Counsel then turned to the funding agreement in issue, to Clause 4.2 (h), Clause 6.2, Clause 6.1, Clause 10, Clause 13, and

14, which he said demonstrate that in practice the litigation funders are likely to exercise considerable control over parties who obtain

their investments.

18 (i) Colm Ó hOisín, S.C. made the oral reply on behalf of the plaintiffs. Counsel pointed out that the defendants were arguing that

there is a per se prohibition on this type of agreement, while the plaintiffs do not accept that at all. He submitted that it is not simply

a matter of determining if an independent connection existed, it is a question of asking whether it, the agreement, is interfering with

the purity of justice, or the administration of justice. He brought the Court to the Hong Kong case of Unruh, and to the analysis at

para. 86 to change in public policy, and to an analysis of an arrangement to see whether it poses a genuine risk to the integrity of

the Court’s process. He submitted that the plaintiffs were not seeking a pre-clearance and setting up of a system whereby they must

pre-clear these types of arrangements, but to supply a framework of principle which accommodates legitimate concern.

18. (ii) Counsel referred to the funding agreement, which he described as a very carefully crafted document, in accordance with a

template which flows from the code of conduct for litigation funders, which, he submitted, does not give the funder control in the

proceedings. He submitted that there was nothing injurious to the administration of justice; that, in fact, the objectives run the other

way, they are matters which aid the efficient disposal of cases and assist in the administration of justice. He brought the Court to

clause 4.2, and a series of steps relating to information. He submitted that it is a reasonable and proportionate balance between the

interest the funder has, having put up significant money for the conduct of the proceedings, and at the same time respecting the

rights of the plaintiffs to conduct the litigation. Counsel referred also to clause 10. He said that it arose only where the legal

representatives have advised that the claimants should accept an offer, and the claimants reject the offer. He brought the Court to

clause 9, which indicates also the manner in which the proceeds are to be applied.

18. (iii) Counsel submitted that the plaintiffs need the assistance of third party funding to proceed with the case.

18. (iv) Counsel pointed out that the funding agreement here happened after the proceedings were issued, and that thus it does not

involve the stirring up of litigation.

18. (v) Counsel submitted that the plaintiffs sought approval for the funding in the particular circumstances, where the funding is

provided after the proceedings have commenced, where the case cannot continue without funding, and where there is a high public

interest in the proceedings advancing to trial. Further, that HF3 is a reputable funder, which funds cases in many jurisdictions, and

where, it was submitted, there is no credible basis to believe that its involvement as a funder will undermine the administration of

justice. On the contrary, it was submitted, by permitting the plaintiffs to avail of the funding, access to, and the administration of

justice, will be positively enhanced.

The Funding Agreement

19. (i) The Investment Agreement in issue was entered into on the 25th March, 2015, between HF3, an exempted limited partnership

under the laws of the Caymen Islands, the plaintiffs, and Tony Boyle and Michael McGinley l (the shareholders).

19. (ii) It states that the plaintiffs consider that they have or may have a cause of action or causes of legal action against the

defendants; that the plaintiffs consider that it is in the best interests of the plaintiffs to enter into the agreement in order to provide

financial backing for the plaintiffs’ legal costs and disbursements that will be incurred by the plaintiffs in the proceedings, including the

purchase by the plaintiffs of adverse costs insurance, and to otherwise protect the assets of the plaintiffs against any adverse costs

order made in such proceedings. It is a condition of the agreement that the parties enter into a security agreement that is

satisfactory to HF3.

19. (iii) The plaintiffs submitted that the agreement did not offend any public policy concerns relating to the doctrines of maintenance

and champerty. The agreement provides that HF3 will act in accordance with the Code of Conduct for Litigation Funders; that HF3 is

entitled to information but cannot interfere with the litigation; that HF3 cannot withhold consent to change in the plaintiffs’ counsel;

that the decisions whether to prosecute, compromise, continue or discontinue the proceedings are at all times within the exclusive

control of the plaintiffs; that the role of HF3 is exclusively that of a funder; that the funder will observe confidentiality; that the

funder will not take any steps that cause or are likely to cause the funded party’s solicitor or barrister to act in breach of their

professional duties; and that the funder will not seek to influence the plaintiffs’ solicitor or barrister to cede control to the funder.

19. (iv) It was submitted that there was no conflict of interest between the plaintiffs and HF3; HF3 is entitled to be informed but it

does not control the litigation; HF3 did not stir up litigation; the litigation was in existence years before HF3 became involved; it was

submitted that the extent of HF3’s potential remuneration in the event of the success of the proceedings was not relevant to the

analysis of whether the funding is contrary to the doctrines of maintenance and champerty.

19. (v) On behalf of the State it was submitted that the agreement gives to the funder a degree of control over the proceedings. For

example, the funder alone dictates the identity of the Q.C., whose role it is to arbitrate disagreements between the funder and the

plaintiffs with regard to whether or not an offer in settlement of the action should be settled, thus providing the funder with a degree

of control in relation to the area of settlements. It was submitted that this is the kind of dynamic that imperils the proper

administration of justice and is contrary to public policy.

Decision

20. It is not necessary to consider the investment agreement in detail, as its fundamental object is the issue before the Court. The

core object of the agreement between the parties is for HF3 to fund the plaintiffs’ litigation. Apart from being the funder of the

litigation, HF3 has no connection with the plaintiffs.

21. The issue is whether such an agreement to fund, where there is no connection between the plaintiffs and the funder other than

the funder’s decision to fund, is contrary to law.

Law

22. The Statute Law Revision Act, 2007, repealed certain statutes that were enacted before the 6th December, 1922, and which had

ceased to have effect. It repealed 3,226 Acts, and provides a definite list of 1,364 pre-1922 Acts which continue in force. The list of

statutes which continue in force include the Statute of Conspiracy (Maintenance and Champerty) of an unknown date in the 14th

century, the Maintenance and Embracery Act 1540, and the Maintenance and Embracery Act, 1634 insofar as it concerned

maintenance and champerty.

23. Section 3 of the Act of 1634 states:-

“That no manner of person or persons, of what esteate, degree or condition soever he or they be, doe hereafter

unlawfully maintaine or cause or procure any unlawful maintenance in any action, demaund, suite or complaint in any of

the Kings courts of the chancery, castle-chamber, or elsewhere within this his Highnesse Realme of Ireland … and also,

that no person or persons of what estate, degree, or condition soever he or they be, doe hereafter unlawfully retaine for

maintenance of any suit or plea any person or persons, or embrace any free-holders or jurors, or suborne any witnesses

by letters, rewards, promises, or any other sinister labour or means for to maintaine any matter or cause, or to the

disturbance or hinderance of justice, or to the procurement or occasion of any manner of perjury by false verdict or

otherwise in any manner of courts aforesaid”.

24. Thus, the torts and crimes of maintenance and champerty have been retained in Ireland.

25. Maintenance may be defined as the giving of assistance, by a third party, who has no interest in the litigation, to a party in

litigation. Champerty is where the third party, who is giving assistance, will receive a share of the litigation succeeds.

26. Maintenance and champerty are offences which evidence a public policy.

27. While the Court was not given any evidence of a prosecution for champerty in recent times, the offence is still extant.

28. A definition of the crime of maintenance and the crime of champerty may be found in legal texts.

29. Thus, Cross & Jones, An Introduction to the Criminal Law, 4th Ed., (London, 1959), at p. 294, defines the crime of “Maintenance”

as:-

“… the officious intermeddling in a civil suit, which usually takes the form of the payment of costs by a stranger without

just cause such as charity or friendship or without any interest in the litigation in question”.

It is described as a common law misdemeanour.

The crime of Champerty is described as:-

“… the agreement to participate in the proceeds of civil litigation”.

It is described also as a common law misdemeanour. Reference is made by Cross and Jones on the same page, to “common barratry”,

as the unjustifiable stirring up of litigation.

30. While the law on the issue has ancient roots, there are recent cases regarding maintenance and champerty.

31. Thus, in McElroy v. Flynn [ 1991] I.L.R.M. 294, the High Court, (Blayney J.) held that where a person undertakes actively to

assist in the recovery of shares in an estate to which another person is entitled; an agreement whereby the former person will receive

a percentage of the shares in the estate, is an agreement in the nature of champerty because it involves the plaintiff giving active

assistance in the recovery of the defendants’ claims and it gave the plaintiff a share of the property recovered. Consequently it was

contrary to public policy and was void.

32. In McElroy v. Flynn Blayney J. referred to a leading case, Rees v. De Bernardy [1896] 2 Ch 437, on champerty. There Romer J.

held, at 446:-

“… the agreement induced by the defendant is one in the nature of champerty and void as being contrary to the policy of

the law. It is not necessary in cases of this kind, in order that the agreement should be held void, that it should amount

strictly in point of law to champerty or maintenance so as to constitute a punishable offence: see, amongst other cases,

Reynell v Sprye 1 DM & G 660. In that case Knight Bruce L.J., with reference to the agreement there impeached, said:-

‘Such an understanding, such an agreement … may or may not have amounted strictly in point of law to champerty

or maintenance so as to constitute a punishable offence, but must in my judgment be considered clearly against the

policy of the law, clearly mischievous, clearly such as a court of equity ought to discourage and relieve against’.

33. In the High Court, in Fraser v. Buckle [1994] 1 I.R. 1, Costello J. stated at p. 13:-

“To examine the arguments advanced by the parties I think it would be helpful if I began by simplifying them by

considering the general principles which should be applied to an heir-locator agreement which has been made in Ireland

and which related to a share in an Irish estate. The general principles of the law of maintenance and champerty are easily

ascertained and are not controversial. “Maintenance” has been defined as the giving of assistance or encouragement to

one of the parties to an action by a person who has neither an interest in the action nor any other motive recognised by

law as justifying his interference. “Champerty” is a particular kind of maintenance, that is maintenance of an action in

consideration of a promise to give the maintainer a share in the subject matter or proceeds”.

34. Costello J. then quoted Lord Denning’s description of champerty in In re Trepca Mines Ltd. (No. 2) [1963] Ch. 199:-

“But there is one species of maintenance for which the common law rarely admits of any just cause or excuse and that is

champerty. Champerty is derived from campi partitio (division of the field) It occurs when the person maintaining another

stipulates for a share of the proceeds: (see definitions collected by Scrutton L.J. in Haseldine v. Hosken [1933] 1 K.B.

811, 831). The reasons why the common law condemns champerty is because of the abuses to which it may give rise.

The common law fears that the champertous maintainer might be tempted, for his own personal gain, to inflame the

damages, to suppress evidence, or even to suborn witnesses. These fears may be exaggerated; but, be that so or not,

the law for centuries had declared champerty to be unlawful and we cannot do otherwise than enforce the law.”

35. In Fraser v. Buckle [1996] 1 I.R. 1, on appeal from the decision of Costello J., the issues of maintenance and champerty were

addressed by the Supreme Court. McElroy v. Flynn [1991] I.L.R.M. 294, was approved and Rees v. de Bernardy [1896] 2 Ch. 437

applied. The Supreme Court, in a judgment by O’Flaherty J., with whom Hamilton C.J. and Barrington J. agreed, held that the

agreements in issue were champertous and unenforceable in law. The plaintiffs had entered into agreements with the defendants

whereby the plaintiffs would reveal the identity of the deceased intestate in consideration of the defendants giving to the plaintiffs’

one third of any sum they might inherit. The defendants ultimately shared a sum of more than $750,000. They did not pay the

plaintiffs the one third share on the basis that the agreements were unenforceable as being champertous, although they did accept

that the plaintiffs were entitled to fees. The High Court had decided that the agreements were contrary to public policy and so

unenforceable. The Supreme Court dismissed the plaintiff’s appeal and upheld the trial judge’s findings that the agreements were

champertous and unenforceable in Irish law. O’Flaherty J. stated that the law on maintenance and champerty had not changed in this

jurisdiction, upholding McElroy v. Flynn.

36. In Thema International Fund v. HSBC Institutional Trust Services (Ireland) [2011] 3 I.R. 654, the High Court (Clarke J.) held that

the plaintiff was in receipt of some form of third party funding. The High Court stated:-

“However, I am also satisfied on the evidence that any funder has a sufficient connection with the plaintiff so as to take

that funding outside the scope of maintenance and/or champerty.”

The High Court pointed out, further at 663:-

“However, a third party funder who is not guilty of champerty (i.e. who has the sort of legitimate interest in the case

identified in the champerty jurisprudence) is, in my view, in a different situation. They are, even if only indirectly, already

involved in the litigation. Any company which lacks funds always has the possibility that its shareholders (or its creditors)

may choose to provide further funding for a whole range of reasons not confined to potential litigation. Commercial

judgment will often lead to parties with a direct interest in a particular enterprise investing further sums. There is,

therefore, in my view a substantial difference between a party who already has an indirect link to the impecunious party

and who has, therefore, already got an indirect interest in the relevant litigation, on the one hand, and a party with no

such prior link who simply buys into the litigation on the other hand. A party in the position of HTIE must be aware that

shareholders in or others with an indirect interest in Thema may well chose to fund Thema so as to enable it to pursue

litigation which is in Thema’s interests but which will also, potentially, indirectly benefit them by increasing the value of

the shareholding in Thema or permitting Thema to pay its lawful obligations.”

37. The obiter in the above case may be distinguished from the facts of the appeal before the Court, as the funder there was held to

have had a sufficient connection with the plaintiff. That is not the case between the funder and the plaintiffs in this action. This case

raises the single issue as to whether the professional funding agreement is contrary to public policy, and is champertous.

38. There is no doubt that the offence and tort of champerty are extant in Ireland.

39. The Law Reform Commission, referred to as “the LRC”, has published an Issues Paper on “Contempt of Court and other offences

and torts involving the administration of Justice”, (LRC IP 10 – 2016). In its overview it states:-

“The crime, and tort, of maintenance occurs where a third party supports litigation without just cause. Champerty is an

“aggravated form” of maintenance where the third party supports litigation without just cause in return for a share of the

proceeds”. (Greenclean Waste Management Ltd. v. Leahy p/a Maurice Leahy & Co. Solicitors (No. 2) [2014] IEHC 314).

40. Thus, while both the tort and offence of champerty are still law in Ireland, the boundaries of the tort and offence are relevant to

this appeal.

41. The LRC has looked at the issues of maintenance and champerty in other common law jurisdictions. It points out that the Criminal

Law Act, 1967, abolished the crimes and torts of maintenance and champerty in England and Wales. As in England and Wales, many

other States have abolished the torts and crimes of maintenance and champerty, and thus their case law is of less relevance to the

situation in Ireland, where the crimes and torts of maintenance and champerty still exist. As the LRC pointed out:-

“6.17. The retention of the torts and crimes of maintenance and champerty in Ireland affects a number of different areas

ranging from the validity of so-called “heir-locator” agreements to the legitimacy of professional third party funding of

litigation”.

42. In essence, the issues before the Court are: do the tort and crime of champerty exist in Irish law? What are the parameters of

the tort and offence of champerty? Is the professional funding agreement of the plaintiffs champertous?

43. In Fraser v. Buckle Costello J. said that a helpful summary of the law and the reasons why champertous agreements are contrary

to law may be found in Trepca Mines Ltd (No. 2) (1963) Ch. 199 where Lord Denning MR stated at p. 13:-

“The reasons why the common law condemns champerty is because of the abuses to which it may give rise. The common

law fears that the champertous maintainer might be tempted, for his own personal gain, to inflame the damages, to

suppress evidence, or even to suborn witnesses. These fears may be exaggerated; but, be that so or not, the law for

centuries had declared champerty to be unlawful and we cannot do otherwise than enforce the law.”

44. This statement was approved by Lynch J. in O’Keeffe v. Scales [1998] 1 I.R. 290 at 295 Lynch J. held:-

“A person who assists another to maintain or defend proceedings without having a bona fide interest independent of that

other person in the prosecution or defence of those proceedings acts unlawfully and contrary to public policy and cannot

enforce an agreement with that other person for any form of benefit.”

45. Counsel for the plaintiffs brought Saunders v. Houghton [2010] 3 NZLR 331 to the attention of the Court. The New Zealand

High Court struck out part of the claim but confirmed that one of the shareholders could sue in a representative capacity; dismissed

an application for a stay brought on the grounds that the litigation funding and management agreement was an abuse of process; and

declined to strike out the claim for breach of fiduciary duty.

46. Unruh v. Seeberger [2007] HKCFA 9, was also brought to the attention of the Court. This Hong Kong case contains a very

interesting discussion on champerty in the judgment of Ribeiro P.J. He discusses what the public policy in champerty involves. At para.

119 he stated:-

“The continued retention by Hong Kong of criminal and tortious liability for maintenance and champerty may not be

justified and this question merits serious legislative attention.”

However, the Court did not seek to impose the public policy of Hong Kong on mature commercial parties (who are likely to include

foreign entities) who have chosen to arbitrate in a jurisdiction which does not recognise the concepts and who may have made

arrangements in Hong Kong to finance the arbitral proceedings without being aware of any constraints.

47. It has been well recognised that contracts of a champertous nature relating to other jurisdictions may be lawful. As Denning M.R.

said in In Re Trepca Mines Ltd (No. 2) [1963] Ch. 199 at 218:-

“If they had concerned French litigation, they might have been lawful, because I understand champerty is lawful in

France”.

Similarly, in Giles v. Thompson [1993] 3 ALL ER 321 at 332 Lord Steyn L.J.

stated:-

“An agreement of a champertous nature made in England is valid if it relates to litigation in a country where champerty is

lawful. This illustrates that one is not dealing with an overriding public policy, which applies wherever the agreement is

made or to be performed, such as an agreement to pay a bribe abroad. It is designed to protect the integrity of the

English judicial system.”

48. Consequently, in Unruh the champerty argument advanced on the appellants’ behalf failed on the above ground also. It was

held:-

“122. The Hong Kong court should not strike down an agreement on the grounds of maintenance or champertous where it

is to be performed in relation to judicial or arbitral proceedings in a jurisdiction where no such public policy exists.

123. I leave open the question whether maintenance and champerty apply to agreements concerning arbitrations taking

place in Hong Kong since it does not arise in the present case.”

In addition, Unruh may be distinguished as there is no doubt that Mr. Unruh had an independent interest in the outcome of the

litigation.

49. In Greenclean Waste Management Limited v. Maurice Leahy Practising under the style and title of Maurice Leahy & Co. Solicitors

(No. 2) [2014] IEHC 314, Hogan J. considered that the law as to maintenance and champerty must be viewed in accordance with

modern ideas of property. However, as stated by Lynch J. in O’Keeffe v. Scales [1988] 1 I.R. 290, the law relating to maintenance

and champerty still exists in the State. And, as O’Flaherty J. held in Fraser v. Buckle [1994] 1 I.R. 1 , the law on maintenance and

champerty has not undergone any sea change in this jurisdiction since the 19th century.

50. Recently, in SPV Osus Ltd v. HSBC International Trust Services (Ireland) Ltd [2015] IEHC 602, where the issue was an assignment

of claim agreement, the High Court (Costello J.) stated at para 40:-

“Professional third party funders who make a commercial decision to ‘invest’ in litigation in the hope of making a profit

commit the torts of either maintenance and/or champerty”.

And in the Court of Appeal, Ryan P., at paragraph 34, gave the following description:-

“The general understanding which is not in dispute is that champerty is a variety of maintenance, in fact a more severe or

heinous version. Broadly speaking, maintenance is interfering in litigation by supporting it financially without having any

legitimate interest in the case which could justify the interference. Champerty is taking a share in the outcome of the

case in return for funding it.”

51. (i) In Thema International Fund v. HSBC Institutional Trust Services (Ireland) [2011] 3 I.R. 654, during case management of the

case, the defendant applied for orders requiring the disclosure of the plaintiff’s funding for the purposes of the litigation. The Court

accepted that the plaintiff was in receipt of some form of third party funding. However, the Court held that the funders had a

legitimate interest in the litigation. Hence, this is a case of an exception to the general rule on champerty. Clarke J. held at para. 11:-

“However, I am also satisfied on the evidence that any funder has a sufficient connection with the plaintiff so as to take

that funding outside the scope of maintenance and/or champerty”.

51. (ii) Case law from other jurisdictions was quoted to Clarke J. He held in para. 22:

“I am not satisfied that case law from other common law jurisdictions which post dates a change in the law in relation to

maintenance and champerty (whether by judicial decision or by statute) is of great assistance in determining the extent

of the court’s jurisdiction to order disclosure at an early stage of a third party funder in a jurisdiction such as Ireland

where maintenance and champerty remains the law. Here the situation is very different. In Ireland it is unlawful for a

party without an interest (or some other legitimate concern including charity) to fund the litigation of another at all and,

in particular, it is unlawful to fund litigation in return for a share of the proceeds. The only form of third party funding

which is, therefore, legitimate in Ireland is one which comes within the exceptions to maintenance and champerty.”

51. (iii) The High Court pointed out further, at paragraph 26:-

“However, a third party funder who is not guilty of champerty (i.e. who has the sort of legitimate interest in the case identified in the

champerty jurisprudence) is, in my view, in a different situation. They are, even if only indirectly, already involved in the litigation.

Any company which lacks funds always has the possibility that its shareholders (or its creditors) may choose to provide further

funding for a whole range of reasons not confined to potential litigation. Commercial judgment will often lead to parties with a direct

interest in a particular enterprise investing further sums. There is, therefore, in my view a substantial difference between a party who

already has an indirect link to the impecunious party and who has, therefore, already got an indirect interest in the relevant litigation,

on the one hand, and a party with no such prior link who simply buys into the litigation on the other hand. A party in the position of

HTIE must be aware that shareholders in or others with an indirect interest in Thema may well chose to fund Thema so as to enable it

to pursue litigation which is in Thema’s interests but which will also potentially, indirectly benefit them by increasing the value of the

shareholding in Thema or permitting Thema to pay its lawful obligations.

51. (iv) While the judgment of Clarke J. is partly obiter, it reflects the well rehearsed law on champerty in decisions of the High and

Supreme Court over the last forty years. Thus, it should be given considerable weight.

52. The LRC in its Issues Paper on Contempt of Court and other offences and torts involving the administration of justice, (LRC IP 10

– 2016), has noted that:-

(a) In light of the importance of providing access to justice, it is certainly arguable that legislation should be introduced

to allow for third party funding of litigation by person or body who does not have a legitimate interest in the proceedings.

[6.33]

(b) In England and Wales third party funding is permitted by statute, and is governed by a non-statutory Code of Conduct

for Litigation Funders. In England and Wales a particular concern in connection with third party funding is that funders

sometimes influence or attempt to influence, the direction of proceedings, for example through the selection of experts or

by trying to influence settlement discussions. [6.34]

(c) Third party funding has been permitted in Australia. [6.35]

(d) The Law Reform Commission of Hong Kong published a consultation paper in 2015 proposing that third party funding for

arbitration should be permitted and should not be regarded as champerty or maintenance. [6.36]

Conclusion

53. I am satisfied that the appeal should be dismissed.

54. (i) This investment agreement, is an agreement by HF3 to fund the plaintiffs’ case. HF3 have no connection with the plaintiffs,

apart from an agreement to fund their proceedings. It is, thus, a champertous agreement as described in case law by the High Court

and this Court over the last four decades. It is not an exception as permitted by law for such an agreement.

54. (ii) While the statutes of the 14th Century, 1540 and 1634 were declaratory of the common law, the common law has been stated

clearly in recent cases, such as by Costello J. in Fraser v. Buckle [1994] 1 I.R. 1, by Lynch J. in O’Keeffe v. Scales [1998] 1 I.R. 290,

by Costello J. in the High Court in SPV Osus Ltd v. HSBC International Trust Services (Ireland) Ltd [2015] IEHC 602 at para 40; by

Ryan P. in the Court of Appeal; and by Clarke J. in Thema International Fund v. HSBC Institutional Trust Services (Ireland) [2011] 3

I.R. 654.

54. (iii) Champerty remains the law in the State. It has been described clearly in recent cases. A person who assists another’s

proceedings without a bona fide independent interest acts unlawfully.

54. (iv) The case law of other common law jurisdictions it is not very helpful given the clear statements on the law. In this State the

proposed Investment Agreement is a funding agreement which is champertous, and hence it is unlawful. It is an agreement within the

State and hence Irish law applies.

54. (v) It was argued that this Court could develop the common law on champerty in light of modern policy and constitutional issues.

As to policy issues, this would involve complex situations more suited to legislation, after the benefit of an LRC Report. As to

constitutional issues, this was not brought as a constitutional challenge. Clearly, constitutional issues have been parked by the

plaintiffs, perhaps for another day.

54. (vi) The Court was asked not to be seduced into changing the law in the interests of what the Court may perceive to be just. It

may be said that in light of modern issues, such as Ireland being an international trading State, issues arising on international

arbitrations, and in the Commercial Court, it might well be appropriate to have a modern law on champerty and the third party funding

of litigation. However, that is a complex multifaceted issue, more suited to a full legislative analysis. This is re-enforced by the

retention of the old statutes by the Act of 2007, and by the work of the LRC.

54. (vii) However, I do have a concern that the defendants and third party who vigorously opposed the plaintiffs’ motion are

beneficiaries if the case does not proceed. This may be a matter for consideration at another time and place. There is a long history

at the Bar, and amongst solicitors, of taking cases on a “no foal no fee” basis. Many of the most important cases have been taken in

such circumstances. Or, perhaps an alternative route may be found, whereby the litigation would cost less.

54. (viii) The issues raised by the plaintiffs are issues for the Oireachtas, where parameters may be established, and the law

developed, but not in an ad hoc, piecemeal, method.

54. (ix) The issue on which the Court permitted leave to appeal was:-

“Whether third party funding, provided during the course of proceedings (rather than at their outset) to support a plaintiff

who is unable to progress a case of immense ‘public importance’ is unlawful by reason of the rules on maintenance and

champerty.”

I do not find the fact that the funding was provided during the course of the proceedings a relevant factor. Nor do I consider the fact

that the case is described as one of immense public importance to be a relevant factor. However, I do consider that third party

funding to support a plaintiff (where none of the exceptions apply) is unlawful by reason of the rules on champerty. None of the

exceptions arise in this case.

54. (x) Consequently, I would dismiss the appeal.

I agree with the concurring judgments of Clarke J., MacMenamin J., and Dunne J.