The Supreme Court dismissed an appeal by Persona Digital Telephony Ltd. and Sigma Wireless Networks Ltd., ruling that their proposed agreement with professional funder Harbour Fund III, L.P. was champertous and unlawful under Irish law.
The companies had asked the High Court to declare that entering the agreement would not amount to an abuse of process or breach the rules on maintenance and champerty. The agreement would fund their legal costs and disbursements, including adverse costs insurance. The companies said they needed the funding to continue proceedings and argued that the case was of significant public importance.
The Supreme Court held that the funder had no connection with the companies apart from its agreement to finance their case. Under the law as the court described it, maintenance involves assistance to a litigant by a third party without a legally recognised interest; champerty is maintenance in return for a share of the litigation’s proceeds. The court concluded that this agreement fell within that rule and did not qualify for an exception.
The companies argued that the court should assess whether this particular agreement threatened the administration of justice, pointing to terms they said left control of the proceedings with them. The defendants and Michael Lowry, who was a third party in the proceedings, opposed the motion. They argued that professional funding in return for a share of the proceeds was prohibited where the funder had no independent or legitimate interest.
The appeal was a direct appeal from a High Court decision refusing the requested relief. The Supreme Court said the timing of the funding and the claimed public importance of the case did not change the legal result. It also said that changing the law to permit such funding was a matter for the Oireachtas. The companies had not brought a constitutional challenge, so the court did not rule on the constitutionality of the rules or resolve the access-to-justice arguments on that basis.
The judgment, delivered by Chief Justice Susan Denham on 23 May 2017, records that the appeal was dismissed. It did not order the underlying proceedings to stop; the State had accepted that it had not sought to prevent them from continuing.