Court dismisses appeal upholding that third-party litigation funding without independent interest violates maintenance and champerty laws.

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 of Ms. Justice Dunne delivered on the 23rd day of May, 2017.

I agree with the judgment of Denham C. J. just delivered. I wish to make some short observations about the offences of champerty

and maintenance which remain part of Irish law by virtue of the Statute Law Revision Act 2007 (“the Act of 2007”).

S. 2 (1) of the Act of 2007 provided for the repeal of all statutes enacted before 6th December, 1922 then in force save for, inter

alia¸ those specified in Schedule 1 of the Act of 2007 which concerns pre Union Irish Statutes. Schedule 1 lists as one of the

Statutes retained the Maintenance and Embracery Act 1634 (1634 (10 Chas. 1 sess. 3) c. 18) (“the Act of 1634”). Also retained was

a Statute of England of an uncertain date of the 14th Century, namely, the Statute of Conspiracy (Maintenance and Champerty) as

set out in part 2 of the Second Schedule together with the Maintenance and Embracery Act 1540 (1540 (32 Hen. 8) c.15).

Section 3 of the Act of 1634 is set out in the judgment of Denham C. J. (at para. 23) but, for ease of reference, I will set it out here:

“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” .

What then is the offence of maintenance and the offence of champerty? Denham C. J. in her judgment (at para. 29) referred to the

definitions of these offences to be found in Cross and Jones, An Introduction to the Criminal Law, 4th Ed., (London, 1959) (at p.

294).

Archbold’s Pleading, Evidence and Practice in Criminal Cases, 32nd ed., (1949) gives the following definitions at (p.1280):

“Champertors be they that move pleas or suits or cause to be moved either by their own procurement or by others, and

sue them at their proper costs for to have part of the land in variance, or part of the gains: 33 Edw. 1 (Ordinacio de

Conspiratoribus).”

and

“Maintenance is said to consist in the unlawful taking in hand or upholding of or assisting in civil suits, or quarrels of

others, to the disturbance of common right, and from other than charitable motives.”

Ryan and Magee in The Irish Criminal Process (Dublin, 1983), in their Table of Indictable Offences and Penalties, lists champerty as an

offence at common law punishable by imprisonment or a fine, as is maintenance.

In the course of their written submissions, Counsel on behalf of the Appellants posed the question (at para. 72), “When, for example,

was someone last prosecuted under the doctrines?” It appears to be the case that since the foundation of the State, no prosecution

has been brought against anyone in respect of the offences of maintenance and champerty.

It is undoubtedly the case that champerty and maintenance are torts which remain part of the common law in this jurisdiction as

stated in the judgment of Denham C. J. and as reflected in a number of judgments opened to the Court on this appeal. However, no

modern day statute defines the offence of champerty or maintenance. What are the ingredients of the offence? By looking at the

case law in this jurisdiction, one can tell what types of arrangements may fall into the category of being champertous or amount to

maintenance from the point of view of tort law. Could one say with certainty that a particular arrangement is an offence?

Denham J. (as she then was) addressed a similar issue in the case of Attorney General v Hilton [2005] 2 I.R. 374 (“Hilton”) where she

said (at p. 381):

“In criminal law the constituent parts of offences should be clear. The law must be certain. If there is ambiguity, it is

rendered to the advantage of an accused. It is a fundamental principle that the criminal law must be clear and certain.

The constituents of an offence must be clear and certain. The ‘possibility’ that such an offence exists in our common law

is insufficient clarity of the situation. The ambiguity as to its constituent parts is relevant. These are most relevant

factors.”

That was a case which arose in the context of extradition which involved an individual who was sought for prosecution in England for

the offence of cheating the public revenue at common law. The Supreme Court considered whether there was a corresponding

offence in this jurisdiction. There had been a reference to such an offence in the Criminal Justice (Theft and Fraud Offences) Act

2001, which stated (at section 3(2)):

“Any offence at common law of larceny, burglary, robbery, cheating (except in relation to the public revenue), extortion

under colour of office and forgery is abolished.”

Denham J. continued (at p.381):

“Analysis of the possibility that the offence is extant has to be conducted in light of the practice of the last 100 years.

This offence is submitted to be in our common law. Common law is judge-made law. Yet counsel could not bring before

the Court a judicial decision by any judge of this State on such an offence. This must be a relevant factor.

It has been the practice that offences of this type have been prosecuted by way of statutory offences. This is the

modern practice. This is a relevant factor.”

Another interesting case is Corway v Independent Newspapers (Ireland) Ltd. [1999] 4 I.R. 484 (“Corway”) which concerned a

possible prosecution for blasphemous libel. Section 8 of the Defamation Act 1961 provided that no such criminal prosecution could be

brought against a newspaper without leave of a judge of the High Court. The newspaper was represented on an application for leave

to prosecute which was refused by the High Court. (At issue was a cartoon, published following the 1995 divorce Referendum,

depicting a priest and three politicians.) On appeal to the Supreme Court, it was held, inter alia, that in the current state of the law

and in the absence of any legislative definition of the constitutional offence of blasphemy, it was impossible to say of what the

offence of blasphemy consisted. Barrington J. in the course of his judgment commented that (at p. 502):

“The task of defining the crime is one for the legislature, not for the courts. In the absence of the legislation and in the

present uncertain state of the law, the Court could not see its way to authorising a criminal prosecution for blasphemy

against the respondents.”

It goes without saying that criminal offences ought to be clearly defined and legislative provisions which fall short in this regard will

not stand scrutiny. One is entitled to know that if one commits a particular act it is a crime and could lead to a criminal sanction.

The offences at issue in the case of Hilton and Corway referred to above had not resulted in prosecutions for upwards of a hundred

years. In the case of champerty and maintenance, there have been no prosecutions since the foundation of the State and possibly

longer, but there have been a number of cases on the civil side of the courts which have considered the place of these torts in our

law. However, the arguments in this case did not engage with the status of the criminal offences. Denham C. J. noted in her judgment

(at para. 10) quoting from the judgment of the learned trial judge delivered on 20th April, 2016 ([2016] I.E.H.C. 187):

“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.”

An historical analysis of the role of champerty and maintenance would show how the torts of maintenance and champerty have

changed and adapted to reflect the need to protect the integrity and independence of the courts and to prevent trafficking in

litigation over the centuries. (See for example, Winfield, The History of Maintenance and Champerty, (1919) 35 L.Q.R. 50.) It is not

part of the role of the courts to change and adapt the criminal law so as to ensure that the ingredients of an offence reflect what is

necessary to prevent the behaviour that is offensive, in this situation, conduct that interferes with the integrity of the courts and

trafficking in litigation. Thus, the question remains as to whether the definitions of these offences found in sources such as Cross and

Jones referred to in the judgment of Denham C. J. or in Archbold, referred to above, are sufficiently clear to enable a criminal

prosecution to take place for either champerty or maintenance. One can identify certain features which would undoubtedly form part

of the constituent elements of an offence, thus, the giving of financial assistance in return for a share of the proceeds of an action

would, no doubt, be an ingredient in the criminal offence of champerty. What of the mens rea involved in the offence? What intention

would the Director of Public Prosecutions have to prove in order to obtain a conviction?

These are questions for the future. The offences remain on the Statute book despite the fact that they have not been the subject of

any prosecution in living memory. Given that the status of the offences of champerty and maintenance has not been challenged on

the application before the Court, unless and until the issue of their status is raised and argued in an appropriate case, it would be

inappropriate to reach any conclusion on their continued presence in this country as criminal offences.

For the reasons set out in the judgment of Denham C. J., I would dismiss the appeal.