A Supreme Court judge raised questions about the regulation and wider consequences of third-party litigation funding in brief observations attached to a judgment in an appeal concerning Persona Digital Telephony Limited and Sigma Wireless Networks Limited.
Mr Justice John MacMenamin’s judgment, dated 23 May 2017, said he agreed with the judgment of the Chief Justice. He noted that the allegations in the claim were serious, while stressing that the defendants, the notice party and Esat Digifone had denied wrongdoing.
The observations discussed whether maintenance and champerty had fallen into disuse and whether they continued after the enactment of the 1937 Constitution. MacMenamin said that question had to be considered in light of the legal authorities cited by the Chief Justice. He also referred to submissions made for the fourth named defendant about possible consequences of third-party funding.
Such funding could improve access to justice and contribute to legal development, he said, but might also raise concerns. These included the assignment of claims involving personal rights, profit-sharing arrangements, complex multi-party cases, the handling of settlements and differences in the merits of individual claims. He also identified broader questions about regulating funders, limits on their recovery and responsibility for adverse costs orders.
MacMenamin said those issues could raise significant policy questions if maintenance and champerty were found unconstitutional, but described them as matters for another day and potentially for the legislature rather than the courts.
Several issues in the application remained unresolved. The judgment said it was unclear whether the plaintiffs could obtain legal representation without guaranteed payment, although the proceedings appeared likely to be long and complex. A hypothetical proposal for funders to acquire shares in the plaintiff companies also remained unresolved, as did other possible avenues for this unusual litigation.
The extract records MacMenamin’s agreement with the Chief Justice and his observations. It does not set out the Chief Justice’s reasoning or the Court’s operative order, so the outcome of the appeal or application cannot be stated from this extract alone.