Case Summary: Persona Digital Telephony Ltd., and Sigma Wireless Networks Ltd. v. The Minister for Public Enterprise, Ireland, and the Attorney General, and by order Denis O’Brian and Michael Lowry; Appeal No. 72/2016

Republic of Ireland

Where the Plaintiffs sought to have their litigation funded by a professional third party, the Supreme Court rejected their appeal.

Click here for the judgement of Justice Denham

Click here for the judgement of Justice Clarke

Click here for the judgment of the High Court

Background

The Plaintiffs were phone companies who failed in their bid to be awarded mobile phone licences by the State, with Denis O’Brian’s Esat Digifone being favoured for the licence. The Plaintiffs sought to challenge this decision, and brought a motion to the High Court for an order declaring that entering into a funding arrangement with a third party did not breach any laws with regards to maintenance and champerty in civil litigation. Persona Digital Telephony had entered into an agreement with Harbour III Limited to provide financial support for a 40% share of any return. It was asserted by the Plaintiff that the case was of public importance and that it could not be taken without third party funding.

Findings

The High Court rejected this application. Leave was granted to appeal to the Supreme Court which was again rejected.

Reasoning

The Supreme Court held that such a funding arrangement would have been in violation of the Maintenance and Embracery Act 1634, which was retained by the Statute Law Revision Act 2007. This legislation, in accordance with case law and common law principles, prohibits funding from third parties who lack a bona fide interest or connection to the case, with Chief Justice Denham ruling that such an arrangement constitutes a champertous agreement.

Points of Note

It was acknowledged by Justice Clarke that, while he was in agreement with Chief Justice Denham, the issue of funding raised in this case represented ‘‘very real, practical problems in access to justice’’ as the case might not have been able to go ahead without this funding. This may leave the door open for reform on the issue of maintenance and champerty, but not so much as to facilitate what Justice Clarke referred to as the ‘‘commoditisation of litigation.’’