Law Reform Commission of Ireland Consultation Paper on Third-Party Litigation Funding

The Law Reform Commission of Ireland has published a consultation paper on the issue of Third-Party Litigation Funding. The concept refers to investment by non-parties in dispute resolution.

From the executive summary:

"In Persona Digital Telephony Ltd v Minister for Public Enterprise, the Supreme Court confirmed that the torts and offences of maintenance and champerty remain part of Irish law. These ancient legal concepts prohibit, in most cases, the funding of litigation by third parties. One of the effects of these torts and offences is to make third-party funding (investment by non-parties in dispute resolution), subject to certain recognised exceptions, illegal in this jurisdiction. In SPV Osus Ltd v HSBC Institutional Trust Services (Ireland) Ltd, the Supreme Court held that maintenance and champerty also prohibit the assignment of a “bare” cause of action, that is, the transfer of the right to litigate a claim to a party who has no direct interest in that claim."

"As part of its Fourth Programme of Law Reform, in 2016 the Commission published an Issues Paper on Contempt of Court and Other Offences and Torts Involving the Administration of Justice. This sought submissions on whether the torts and offences of maintenance and champerty should be abolished, whether third-party funding should be permitted and how, if legalised, third party funding should be regulated. Only two submissions were received on these issues."

"Since publication of the Issues Paper, the legal and policy context for thirdparty funding has shifted considerably. The Commission therefore concluded that it was appropriate to publish a detailed Consultation Paper, setting out the up-to-date position in respect of the legalisation and regulation of thirdparty funding in Ireland and seeking further views. In addition, the issue of assignment of actions should be taken into account. The Commission has generally refrained from expressing even preliminary or provisional views on the issues discussed in this Consultation Paper. Its purpose is to inform debate and stimulate discussion which, it is hoped, will generate responses from all interests and perspectives that will enable the Commission to move to a final report setting out its recommendations."