Third-party litigation funding models set out in paper
The Law Reform Commission has published a new consultation paper on third-party litigation funding, setting out five possible regulatory models which could be adopted in Ireland.
The 207-page consultation document highlights international examples from England and Wales, Hong Kong and New Zealand to set out various ways in which third-party funding could be regulated in the State.
At present, Irish law prohibits the funding of legal cases by outside parties who do not have a legitimate and independent interest in the dispute, subject to certain exceptions.
The prohibition is founded on the ancient concepts of maintenance and champerty which determine such activity as torts and offences. The Supreme Court confirmed in Persona Digital Telephony Limited v Minister for Public Enterprise [2017] IESC 27 that these torts and offences remain part of the law in Ireland.
In SPV Osus v HSBC Institutional Trust Services (Ireland) Ltd [2018] IESC 44, the Supreme Court held that maintenance and champerty also prohibit the assignment of a “bare” cause of action, i.e. the transfer of the right to litigate a claim to a party who has no direct interest in that claim.
However, the Law Reform Commission said it was appropriate to publish a consultation paper on the subject given the “evolution of the legal and policy context for third-party funding, which has resulted in the liberalisation of the statutory and regulatory framework in many countries”.
The consultation will run until 3 November 2023.