Judgment delivered the 23rd day of May, 2017, by Denham C.J.
Introduction
1. This appeal raises issues in relation to the torts and offences of maintenance and champerty, and to professional third party funding of litigation.
2. Persona Digital Telephony Ltd and Sigma Wireless Networks Ltd., the plaintiffs and appellants in the proceedings, are referred to collectively as “the plaintiffs”.
3. The Minister for Public Enterprise, Ireland, the Attorney General and Denis O’Brien are the defendants and respondents in the proceedings, and are referred to collectively as “the defendants”. The first three defendants are referred to as “the State”. The fourth named defendant is referred to as “the fourth named defendant”.
4. Michael Lowry, the third party, is referred to as “the third party”.
5. The plaintiffs brought a notice of motion, dated the 25th March, 2015, to the High Court, seeking:-
“An Order, by way of a Declaration or otherwise, pursuant to the inherent jurisdiction of this Honourable Court and/or Order 34 of the Rules of the Superior Courts, that in entering into this litigation funding arrangement with Harbour Fund III, L.P., the plaintiffs are not engaging in an abuse of process and/or are not contraversing rules on maintenance and champerty”.
Funding Agreement
6. The directors of the plaintiffs consider that the plaintiffs have or may have a cause or causes of legal action against the defendants. The directors of the plaintiffs decided that it was in the best interests of the plaintiffs to enter into an investment agreement with Harbour Fund III, LP, an exempted limited partnership under the laws of the Cayman Islands, referred to as “HF3”, in order to provide financial backing for the plaintiffs’ legal costs and disbursements that would be incurred by the plaintiffs in the proceedings, including for the purchase of the plaintiffs’ adverse costs insurance, and to otherwise protect the assets of the plaintiffs against any adverse costs order made in or relating to any such proceedings. It was a condition of the agreement that the parties enter into a security agreement that was satisfactory to HF3. The agreement was entered into on the 25th March, 2015, between HF3, the plaintiffs, Tony Boyle and Michael McGinley. I shall return to further detail this agreement later in the judgment.
7. This is the first case to come before the Court which raises the issue of the potential use of a third party professional funding agreement to support a party in legal proceedings.
8. Inter alia, the plaintiffs contended that the third party funding scheme should be considered in context, and that the question should be asked whether, on the whole, the transaction amounts to unlawful maintenance or champerty, or whether it should be viewed as enabling a claim of public importance to proceed and to ensure the constitutional guarantee of access to justice.
9. The State submitted that maintenance and champerty are criminal offences as well as torts, being common law offences which have had statutory recognition for hundreds of years. The State relied on the Maintenance and Embracery Act 1634, “the Act of 1634”, which was retained by the Statute Law Revision Act, 2007. The State submitted that the torts of maintenance and champerty are still extant, and that the courts have defined maintenance and champerty in terms which encompass the funding agreement at issue in this case. The State submitted that the funding agreement was void for illegality, and that the plaintiffs were asking the Court to vary the scope of the offences and torts of maintenance and champerty, which was not within the jurisdiction of the Court.
The High Court
10. The High Court (Donnelly J.) delivered judgment on the 20th April, 2016, stating, in conclusion:-
“86. It is important to recall that, the application before the Court is not a constitutional challenge; the Court has not been asked to examine the constitutionality of the offences and torts of maintenance and champerty and no declaration of unconstitutionality has been sought. The resolution of any issues regarding constitutional rights, including access to justice or indeed whether these ancient torts and offences are truly “in accordance with law” awaits any such constitutional challenge. On the basis of the relief claimed in the notice of motion, and in circumstances where the Court is of the view that the ingredients of the offences (and also the torts) of maintenance and champerty have been stated clearly by the Superior Courts of Ireland to prohibit professional third party funding, there are no grounds for entering into an examination of whether the interpretation given to the torts and offences is in accordance with the Constitution.
87. In conclusion, maintenance and champerty continue to be torts and offences in this jurisdiction. From the Irish authorities abovementioned, there is a prohibition on an entity funding litigation in which it has no independent or bona fides interest, for a share of the profits. It is the view of this Court that Harbour III L.P., as a professional third party litigation funder, has no independent interest in this present litigation. Furthermore, it is clear that third party funding arrangements cannot be viewed as being consistent with public policy in this jurisdiction or that modern ideas of propriety in litigation have expanded to such an extent to afford this Court the opportunity to characterise this funding arrangement as acceptable. While the plaintiff has pressed upon this Court that there is a lack of clarity in this regard, that submission is not accepted in view of the consistent line of authorities to the contrary.”
11. Thus, the High Court, on the 12th May, 2016, ordered that the reliefs sought by the plaintiffs be refused.
Determination
12. The plaintiffs applied to this Court for leave to appeal directly from the High Court, a “leapfrog appeal”. On the 25th July, 2016, by Determination [2016] IESCDET 106, leave was granted. This Court granted leave to appeal on the issue of whether third party funding is unlawful by reason of the rules of maintenance and/or champerty. The issues upon which leave was given was stated as:-
“Whether third party funding, provided during the course of proceedings (rather than at their outset) to support a plaintiff who is unable to progress a case of immense public importance, is unlawful by reason of the rules on maintenance and champerty”.
Submissions
13. Separate written submissions were filed on behalf of the plaintiffs, the State defendants, the fourth named defendant, and the third party. In addition, oral submissions were heard by the Court from counsel on behalf of the parties.
Submissions on behalf of the Parties
14.(i) Mr. Michael Collins S.C. made impressive oral submissions on behalf of the plaintiffs which included the following points. He made six preliminary observations. First he pointed out that this Court has certified a particular issue in terms of whether the third party funding agreement in this case is unlawful by reason of the doctrines of maintenance and champerty, thus it is fact specific. Second, he argued, that there was no statutory provision which deals with third party funding. Third, and contrary to the submissions of the defendants, he submitted that there is no Irish decision which has decided the issue of whether third party funding is unlawful as contrary to maintenance and champerty. Fourth, he submitted that the existing Irish case law does not describe maintenance and champerty in terms of a per se prohibition on an agreement which involves a share in the proceeds of the litigation itself. He argued that the mere giving of assistance in return for a share in the proceeds is not champertous. Fifth, he submitted that the plaintiffs were not inviting the Court to abolish the doctrines of maintenance and champerty, but rather asking the Court to analyse the content of maintenance and champerty and to determine whether the present funding agreement is likely to bring about the mischief that maintenance and champerty are designed to protect. Sixth, he submitted that the plaintiffs were inviting the Court to do what it always does when faced with the application of a common law principle to a new factual situation. He asked the Court to develop and clarify a principle of the common law, not to abolish a tort or invent new law.
14. (ii) Counsel addressed the public policy engaged, being the protection of the integrity of the administration of justice. He referred to case law. He considered the situation, where there are some conflicting views, that even if it is a champertous agreement, the proceedings could still go on if the funder agreed to fund, with the risk that at the end of the day the agreement could be held to be unenforceable.
14. (iii) Counsel addressed the issue of whether champerty operates as a per se prohibition on third party funding. (The State argued that the prohibition on third party funding is per se a rule). He argued that the various descriptions of maintenance, and champerty, are nothing more than specific fact examples identified by courts over the years, that they are not an exhaustive definition, and are not a statutory definition. He argued that there is no statute which states that third party funding is illegal per se. He submitted that the statutes are merely declaratory of the common law. He said that in other jurisdictions the courts have not approached the manner as a per se prohibition, but that they have examined the common law rule by reference to the public policy related to the administration of justice, and not as the State submits on this appeal. He pointed out that public policy changes. Counsel argued that it would be incorrect to regard it as a per se prohibition. Such an approach was wrong as it meant a failure to consider and analyse the public policy interests, including entitlement of access to the court and freedom to contract. He submitted that the appropriate approach is to identify some particular harm flowing to the administration of justice from the particular agreement. References were made to case law. Counsel stressed that the appropriate approach for the Court to take was not to consider that it is a per se prohibition, but that the references to maintenance and champerty are mere descriptions of circumstances which can give rise to the public policy issue. On this approach the Court would then identify the public interest factors, and weigh them up. He argued that if the Court took this approach then all the weighing goes in favour of the enforcement of the agreement. He stated that this did not mean that every third party funding agreement would be valid, but he argued that this one is.
14. (iv) Counsel submitted that when one looked at the third party funding agreement in this case, with its features, it does not present objectionable features. He submitted that this third party agreement has not stirred up litigation, that the third party agreement has come to the case after the litigation had commenced. He referred to the description of the agreement in the affidavit of Susan Dunne. He argued that the agreement facilitated and vindicated the plaintiffs’ constitutional right of access to the Court. He argued that the control of the litigation remained with the plaintiffs and the legal team. He referred to cases from other jurisdictions. Counsel submitted that the terms of the agreement in this case were in accordance with the Code of Conduct for Litigation Funders in the United Kingdom. He identified features such as that the funder is entitled to information , but cannot interfere with the litigation, that the choice of solicitors and counsel, and any change, is for the plaintiffs. He submitted that decisions such as whether to prosecute or settle are within the exclusive control of the plaintiffs. Counsel submitted that the standing of HF3 is a factor, and reference was made to the affidavit of Susan Dunne, and to her words, including that HF3:-
“… is the most experienced litigation funder in the UK having reviewed over 1,900 cases since its inception in 2007. As well as cases in the UK, HF2 and its predecessor fund, HF1, have funded litigation and arbitration disputes in numerous jurisdictions including Jersey, Australia, Bermuda, the British Virgin Islands, Canada, Hong Kong, New Zealand and the USA.”
14.(v) Counsel made submissions on what he identified as relevant foreign authorities. He argued that they are of use as there are so few relevant cases in Ireland. He pointed out that this Court frequently looks at the jurisprudence of other common law jurisdictions. He referred to New Zealand, where the torts of maintenance and champerty were not abolished by Statute but still remain. See Saunders v. Houghton [2010] 3 NZLR 331. In that case two shareholders issued proceedings in a representative capacity using the services of a litigation funder. Counsel referred the Court to paragraphs:-
He commended this approach to the Court.
The Court was brought also to McIntyre Estate v. Ontario (Attorney General) [2002] O.J. No. 3417. In Ontario the crimes of champerty and maintenance were abolished in 1954 but they remain as torts on proof of special damage. Particular attention is given to the issue of motive. Counsel quoted from para. 27:-
“The courts have made clear that a person’s motive is a proper consideration and, indeed, determinative of the question whether conduct or an arrangement constitutes maintenance or champerty. It is only when a person has an improper motive, which motive may include, but is not limited to “officious intermeddling” or “stirring up strife”, that a person will be found to be a maintainer.”
Counsel made the submission that in the appeal before this Court there is no improper motive and that HF3 is a reputable funder.
14. (vi) Counsel referred to Ireland’s place on the international stage, and pointed to the International Financial Services Centre as an example. He referred to the Arbitration Act, 2010 as a legislative example, which is modelled on the UNCITRAL model law, and also to our place within international trade. He then looked at the European Commission’s recommendations on third party funding for collective redress actions, where the European Economic & Social Committee have recommended third party funding in that context.
14. (vii) Counsel addressed constitutional issues of access to justice and freedom of contract. The Court was referred to case law, including O’Keeffe v. Scales [1998] 1 I.R. 290, where at p. 295, Lynch J. said:-
“While the law relating to maintenance and champerty therefore undoubtedly still subsists in this jurisdiction, it must not be extended in such a way as to deprive people of their constitutional right of access to the courts to litigate reasonably stateable claims.”
Counsel stressed that maintenance and champerty should not be invoked if one could not identify a specific harm. Counsel addressed the issue of freedom of contract. Reference was made to Quinn v. IBRC [2015] IESC 29, which reviewed jurisprudence from other jurisdictions as to the illegality of contracts, and the public policy that requires courts to refrain from enforcing contracts tainted by illegality. The Court was brought also to Patel v. Mirza [2016] UKSC 42. This included the statement from Lord Neuberger at para. 183:-
“When considering how to characterise, or whether to develop, any fundamental principle of the common law, it is normally sensible for a judge to consider how the principle has been approached in other common law jurisdictions, and it is desirable, if not always achievable, that all common law jurisdictions adopt the same approach.”
14. (viii) Counsel addressed the issue of the function and responsibility of the Court in the evolution of the common law. Counsel brought the Court to Rodriguez v. Speyer Brothers [1919] A.C. 59, where Lord Haldane said:-
“I think that the change in the view taken of the law as to covenants in restraint of trade, and the illustration it affords of the fashion in which decisions which were right in their time may cease to be of valid application, are highly instructive. For they show that between the class of cases in which, as in the instance of the rule against perpetuities, the law, although originally based on public policy, has become so crystallised that only a statute can alter it, and the different class, such as that of the cases relating to wagers, in which the principle of public policy has never crystallised into a definite or exhaustive set of propositions, there lies an intermediate class. Under this third category fall the instances in which public policy has partially precipitated itself into recognised rules which belong to law properly so called, but where these rules have remained subject to the moulding influence of the real reasons of public policy from which they proceeded.”
[emphasis added].
In Giles v. Thompson [1994] 1 AC 142, as counsel pointed out, Lord Steyn suggested that maintenance and champerty might be within that third category.
Counsel submitted that it was part of the function of the Court in evaluating a common law doctrine to look at it in modern circumstances and modern times. Further, counsel referred to the words of Clarke J. in Thema International Fund plc v. HSBC Institutional Trust Services (Ireland) [2011] 3 IR 654.
14.(ix) Finally, counsel turned to the matter of the ancient statutes, to statutes of the 1300s and 1600s, which have been retained by the Act of 2007. He stressed that the statutes have always been treated as simply declaratory of the common law. Thus, it is a matter, he submitted, of interpreting the common law and its boundaries. He argued that the statutes were difficult to understand. They use ancient language and are merely descriptive of maintenance and champerty, and they give some examples of things recognised as evils at that time. Counsel stated that the Act of 2007 repealed 3,226 Acts. He argued for the position that the maintenance and champerty statutes were retained as an exercise in caution. He submitted that the Court could not draw an absolute prohibition from the mere retention of ancient statutes.
14 (x) The plaintiffs sought approval for the funding in the particular circumstances, where the funding is provided after the proceedings have commenced; where it is submitted that the case cannot continue without funding; where there is a high public interest in the proceedings advancing to trial. HF3 was submitted to be a reputable funder, which funds cases in many jurisdictions, and where, it was submitted, there is no credible basis to believe that its involvement as a funder would undermine the administration of justice. It was submitted also that by permitting the plaintiffs to avail of the funding, access to and the administration of justice would be positively enhanced.
15. (i) Mr. John O’Donnell S.C. made submissions on behalf of the State. Inter alia, he stated that maintenance and champerty are, as a matter of statute, still criminal offences in Ireland, and that they are also torts. Further that their status of statutory offences has been re-affirmed in the Act of 2007. The decision to pass the Act of 2007 was a deliberate legislative decision to retain the legislation. He submitted that the Law Reform Commission had not recommended the amendment or abolition of the rule against maintenance or champerty, and has not recommended the introduction of professional third party funding.
15. (ii) Counsel submitted that the law was clear. Reference was made to Fraser v. Buckle [1994] 1 I.R.1, and to Costello J.’s words of description at p. 13. It was submitted that the description covered a third party professional funder; that the funder got a share of the proceeds in consideration of a promise to fund.
15. (iii) Counsel brought the Court to several cases on the law of champertious agreements. This included, for example, In re Trepca Mines Ltd (No. 2) (1963) Ch. 199 and Lord Denning’s statement; and the dicta of Lynch J. in O’Keeffe v. Scales [1998] 1 I.R. 290.
15. (iv) Counsel submitted that because there has been a policy decision to retain the restriction or prohibition, then, as a matter of policy, that the legislative decision should and can only be changed by the passing of legislation. Further, counsel pointed out that the plaintiffs had not mounted a constitutional challenge. Counsel argued that if third party funding is to be permitted by the Court it would in effect be a form of judicial legislation.
15. (v) Counsel accepted that there are certain exceptions where third parties may participate in the funding of litigation, such as people with a common interest, Martell v. Consett Iron Co. Ltd. [1955] Ch 363. The legitimacy of the interest would become a matter for the Court to consider. Counsel submitted that there cannot be a legitimate interest simply by being a funder. The fact that this is a significant case, counsel submitted, is not an allowable exception to the rule against maintenance and champerty.
15. (vi) Counsel argued that the Court should not be seduced into changing the law. He quoted from MR v. An t-Ard Chláraitheoir [2014] IESC 60, where Hardiman J. stated:
“11. It is plainly necessary for any Common Law judge confronted with the (often very seductive) temptation to change the law in the interests of what he or she perceives to be justice, to be very clear as to the legitimate scope of a judge’s ability to do so.”
15. (vii) Counsel argued that if the plaintiffs’ were not successful in this application that there were alternatives open to them, such as someone might do the case for less than the €10 million mentioned, or that someone might do the case on a no foal no fee basis.
15. (viii) Counsel submitted that if the Court gave pre-clearance to this agreement, it would be asked to clear other agreements.
15. (ix) Counsel for the State pointed out that the motion at issue seeks a pre-clearance of the funding agreement, but that it was accepted that the State had not tried to stop the proceedings even if the motion is denied.
15. (x) As to the issue on which leave to appeal was granted, counsel pointed out that it is not addressed to a specific fund or funder or funding agreement, it is a principle. Counsel submitted that the time the funding is made available has not been advanced as a specific ground, and that as a matter of principle there is no distinction arising from the time it commences. Indeed, he submitted, to allow funders to intervene mid-case may be even less desirable because it may leave a plaintiff who has run out of money even more vulnerable.
15. (xi) Counsel addressed the issue of other common law jurisdictions. Counsel submitted that in other common law jurisdictions either the crimes of maintenance and champerty have been abolished or the torts of maintenance and champerty have been abolished. Further, that the change in other jurisdictions has been brought about by statute, for example the Criminal Law Act, 1967, in the United Kingdom, and the Maintenance, Champerty and Barratry Abolition Act, 1993 in Australia. In South Africa the Contingency Fees Act 1997 permitted contingency fees. Hong Kong, he argued, is a separate situation. There maintenance and champerty remain as torts and crimes. He referred to Unruh v. Seeberger [2007] HKCFA 9. He pointed out that references were made to situations where a champertous agreement made in England is valid, if it relates to litigation in another country where champerty is lawful. The policy was to protect the integrity of the English judicial system. Ribeiro P.J. stated:-
Counsel pointed out that that is the issue in this case. Champerty remained a crime in Hong Kong Winnie Lo v. HKSAR [2012] HKCFA 23. The issue was referred to their Law Reform Commission, which looked at it in the context of arbitration.
15. (xii) Counsel made submissions in relation to Thema International Fund plc v. HSBC Institutional Trust Services (Ireland) Limited [2011] IEHC 357; [2011] 3 IR 654. He submitted that Clarke J. in that case was not examining specifically the issue of third party funding, and that the statements were obiter. These statements are opened later in the judgment. Reference was made also to statements as to maintenance and champerty in SPV Osus Ltd v. HSBC International Trust Services (Ireland) Ltd [2015] IEHC 602; SPV Optimal Osus Limited -v- HSBC Institutional Trust Services (Ireland) Limited & Ors [2017] IECA 56.
15. (xiii) Counsel for the State submitted that the intention and purpose of the statutes is to stop people funding litigation..
15. (xiv) As to freedom of contract, counsel argued that not every contract that is made between parties is enforced, he gave as examples a contract to commit a crime; and a gambling contract: Sporting Index v. O’ Shea [2015] IEHC 407.
15. (xv) As to the right of access to the courts, counsel argued that this is not an absolute right, reference was made to the Statute of Limitations.
15. (xvi) Counsel concluded by stressing that champerty is a crime as well as a tort. That the provision of funding would be active assistance to the litigation.
16. (i) The Court heard oral submissions from Mr. Paul O’Higgins, S.C., for the fourth named defendant. Counsel adopted the submissions of counsel for the State.
16. (ii) Counsel stated that the position of the fourth named defendant was that there is a prohibition on third party funding litigation in which the funder has no independent or bona fides interest for a share of the profits. As HF3, a professional third party litigation funder, has no independent interest in the litigation, the plaintiffs are not entitled to the reliefs sought.
16. (iii) Counsel brought the Court to the Statute Law Revision Act, 2007, and to case law, including McElroy v. Flynn [1991] ILRM 294, Fraser v. Buckle [1994] 1 I.R. 1, Rees v. De Bernardy [1896] 2 Ch 437, Giles v. Thompson [1993] 3 All ER 321, Greenclean (No. 2) [2014] IEHC 314, Trendtex Trading Corporation v. Credit Suisse [1980] Q.B. 629 (C.A.), [1982] AC 679 (H.L.). Counsel submitted that neither the issue of whether the case was one of public importance, or the timing of the intervention by the funder, makes any difference.
16. (iv) In counsel’s written submission he concluded that: (i) the rules of champerty and maintenance remain part of Irish law and enjoy a practical vibrancy; (ii) the Courts have recognised the need to interpret those rules in line with constitutional and other legal requirements; (iii) in doing so, the Courts have held that third party funding of litigation in exchange for a share of the proceeds is unlawful, absent a lawful or legitimate interest on the part of the third party funder; (iv) even the most liberal decision on public policy, Greenclean (No. 2), recognised that trafficking in litigation is unlawful; (v) foreign authorities must be treated with caution and are of limited use to the Court; (vi) the third party funder in this case has no lawful or legitimate interest in the litigation and simply seeks to invest in it for a very significant share of the proceeds; (vii) accordingly, the funding agreement is unlawful.
17. (i) The third party was represented by Niall Buckley, B.L., who made oral submissions. Counsel adopted the submissions of the defendants.
17. (ii) First, in his oral submissions, he rejected the obsolescence argument, and said that there were a series of Irish cases in the last quarter century which recognised a continued vibrancy.
17. (iii) Secondly, he addressed the need for something extra; an argument advanced by Mr. Collins S.C., that one needs to identify something beyond the mere share in the proceeds which has some corrosive effect on the administration of justice. He said that the per se theory has it that the Court is engaged in some mechanistic legal formalism, but argued that that is not what the Irish authorities reflect. He argued that there are three elements when one is considering champerty: (i) external financial aid or other assistance, (ii) a share of the proceeds, and (iii) no bona fide independent interest for partaking in the litigation. He argued that the third element allows for considerable nuance and rebuts the argument of a mechanistic approach to access to justice.
17. (iv) He addressed the argument of the plaintiffs that this is a fact specific analysis for the Court. He submitted that such an approach would be ruinous of legal certainty and advocates a quite impractical approach. Such an approach would draw the Court into some kind of pre-clearance role for litigation finance.
17. (v) The plaintiffs had submitted that their funding agreement is not stirring up litigation. Counsel made the point that this litigation agreement application coincides with a revival of the proceedings, and a change in the legal representation, which indicates an impact on the litigation. Also, he submitted that it would be naïve to think that prospectively the ushering in of a litigation finance landscape would not have precisely the effect of stirring up litigation. He referred to empirical data from Australia which indicates such an effect. He argued that if one ushers in litigation finance, it is likely to involve a greater pool of money going into litigation from external sources.
17. (vi) Counsel referred to the differing motivations which bring an investor to litigation. He argued that these are corrosive of the administration of justice. He pointed out that there is no recognised fiduciary relationship involving a funder. Their entitlement to access to advices, and to participate at meetings, raise problematic issues around privilege, and around access to material discovered under implied undertakings. He argued that there has to be a risk that by decoupling plaintiffs from obligations in respect of the costs of pursuing litigation and their costs exposure, there is a risk of a growth in unmeritorious claims and an increased prevalence in oppressive litigation strategies. He said that there would be an inhibition to settlement, as a plaintiff would be compelled to take account of the funder’s costs.
17. (vii) As to the access to justice argument, he submitted that the proposal is no substitute for legal aid. The plaintiffs’ argument is effectively to change rules that have prevailed for several hundred years and are underpinned by sound public policy reasons.
17. (viii) Counsel then turned to the funding agreement in issue, to Clause 4.2 (h), Clause 6.2, Clause 6.1, Clause 10, Clause 13, and 14, which he said demonstrate that in practice the litigation funders are likely to exercise considerable control over parties who obtain their investments.
18 (i) Colm Ó hOisín, S.C. made the oral reply on behalf of the plaintiffs. Counsel pointed out that the defendants were arguing that there is a per se prohibition on this type of agreement, while the plaintiffs do not accept that at all. He submitted that it is not simply a matter of determining if an independent connection existed, it is a question of asking whether it, the agreement, is interfering with the purity of justice, or the administration of justice. He brought the Court to the Hong Kong case of Unruh, and to the analysis at para. 86 to change in public policy, and to an analysis of an arrangement to see whether it poses a genuine risk to the integrity of the Court’s process. He submitted that the plaintiffs were not seeking a pre-clearance and setting up of a system whereby they must pre-clear these types of arrangements, but to supply a framework of principle which accommodates legitimate concern.
18. (ii) Counsel referred to the funding agreement, which he described as a very carefully crafted document, in accordance with a template which flows from the code of conduct for litigation funders, which, he submitted, does not give the funder control in the proceedings. He submitted that there was nothing injurious to the administration of justice; that, in fact, the objectives run the other way, they are matters which aid the efficient disposal of cases and assist in the administration of justice. He brought the Court to clause 4.2, and a series of steps relating to information. He submitted that it is a reasonable and proportionate balance between the interest the funder has, having put up significant money for the conduct of the proceedings, and at the same time respecting the rights of the plaintiffs to conduct the litigation. Counsel referred also to clause 10. He said that it arose only where the legal representatives have advised that the claimants should accept an offer, and the claimants reject the offer. He brought the Court to clause 9, which indicates also the manner in which the proceeds are to be applied.
18. (iii) Counsel submitted that the plaintiffs need the assistance of third party funding to proceed with the case.
18. (iv) Counsel pointed out that the funding agreement here happened after the proceedings were issued, and that thus it does not involve the stirring up of litigation.
18. (v) Counsel submitted that the plaintiffs sought approval for the funding in the particular circumstances, where the funding is provided after the proceedings have commenced, where the case cannot continue without funding, and where there is a high public interest in the proceedings advancing to trial. Further, that HF3 is a reputable funder, which funds cases in many jurisdictions, and where, it was submitted, there is no credible basis to believe that its involvement as a funder will undermine the administration of justice. On the contrary, it was submitted, by permitting the plaintiffs to avail of the funding, access to, and the administration of justice, will be positively enhanced.
The Funding Agreement
19. (i) The Investment Agreement in issue was entered into on the 25th March, 2015, between HF3, an exempted limited partnership under the laws of the Caymen Islands, the plaintiffs, and Tony Boyle and Michael McGinley l (the shareholders).
19. (ii) It states that the plaintiffs consider that they have or may have a cause of action or causes of legal action against the defendants; that the plaintiffs consider that it is in the best interests of the plaintiffs to enter into the agreement in order to provide financial backing for the plaintiffs’ legal costs and disbursements that will be incurred by the plaintiffs in the proceedings, including the purchase by the plaintiffs of adverse costs insurance, and to otherwise protect the assets of the plaintiffs against any adverse costs order made in such proceedings. It is a condition of the agreement that the parties enter into a security agreement that is satisfactory to HF3.
19. (iii) The plaintiffs submitted that the agreement did not offend any public policy concerns relating to the doctrines of maintenance and champerty. The agreement provides that HF3 will act in accordance with the Code of Conduct for Litigation Funders; that HF3 is entitled to information but cannot interfere with the litigation; that HF3 cannot withhold consent to change in the plaintiffs’ counsel; that the decisions whether to prosecute, compromise, continue or discontinue the proceedings are at all times within the exclusive control of the plaintiffs; that the role of HF3 is exclusively that of a funder; that the funder will observe confidentiality; that the funder will not take any steps that cause or are likely to cause the funded party’s solicitor or barrister to act in breach of their professional duties; and that the funder will not seek to influence the plaintiffs’ solicitor or barrister to cede control to the funder.
19. (iv) It was submitted that there was no conflict of interest between the plaintiffs and HF3; HF3 is entitled to be informed but it does not control the litigation; HF3 did not stir up litigation; the litigation was in existence years before HF3 became involved; it was submitted that the extent of HF3’s potential remuneration in the event of the success of the proceedings was not relevant to the analysis of whether the funding is contrary to the doctrines of maintenance and champerty.
19. (v) On behalf of the State it was submitted that the agreement gives to the funder a degree of control over the proceedings. For example, the funder alone dictates the identity of the Q.C., whose role it is to arbitrate disagreements between the funder and the plaintiffs with regard to whether or not an offer in settlement of the action should be settled, thus providing the funder with a degree of control in relation to the area of settlements. It was submitted that this is the kind of dynamic that imperils the proper administration of justice and is contrary to public policy.
20. It is not necessary to consider the investment agreement in detail, as its fundamental object is the issue before the Court. The core object of the agreement between the parties is for HF3 to fund the plaintiffs’ litigation. Apart from being the funder of the litigation, HF3 has no connection with the plaintiffs.
21. The issue is whether such an agreement to fund, where there is no connection between the plaintiffs and the funder other than the funder’s decision to fund, is contrary to law.
Law
22. The Statute Law Revision Act, 2007, repealed certain statutes that were enacted before the 6th December, 1922, and which had ceased to have effect. It repealed 3,226 Acts, and provides a definite list of 1,364 pre-1922 Acts which continue in force. The list of statutes which continue in force include the Statute of Conspiracy (Maintenance and Champerty) of an unknown date in the 14th century, the Maintenance and Embracery Act 1540, and the Maintenance and Embracery Act, 1634 insofar as it concerned maintenance and champerty.
23. Section 3 of the Act of 1634 states:-
“That no manner of person or persons, of what esteate, degree or condition soever he or they be, doe hereafter unlawfully maintaine or cause or procure any unlawful maintenance in any action, demaund, suite or complaint in any of the Kings courts of the chancery, castle-chamber, or elsewhere within this his Highnesse Realme of Ireland … and also, that no person or persons of what estate, degree, or condition soever he or they be, doe hereafter unlawfully retaine for maintenance of any suit or plea any person or persons, or embrace any free-holders or jurors, or suborne any witnesses by letters, rewards, promises, or any other sinister labour or means for to maintaine any matter or cause, or to the disturbance or hinderance of justice, or to the procurement or occasion of any manner of perjury by false verdict or otherwise in any manner of courts aforesaid”.
24. Thus, the torts and crimes of maintenance and champerty have been retained in Ireland.
25. Maintenance may be defined as the giving of assistance, by a third party, who has no interest in the litigation, to a party in litigation. Champerty is where the third party, who is giving assistance, will receive a share of the litigation succeeds.
26. Maintenance and champerty are offences which evidence a public policy.
27. While the Court was not given any evidence of a prosecution for champerty in recent times, the offence is still extant.
28. A definition of the crime of maintenance and the crime of champerty may be found in legal texts.
29. Thus, Cross & Jones, An Introduction to the Criminal Law, 4th Ed., (London, 1959), at p. 294, defines the crime of “Maintenance” as:-
“… the officious intermeddling in a civil suit, which usually takes the form of the payment of costs by a stranger without just cause such as charity or friendship or without any interest in the litigation in question”.
It is described as a common law misdemeanour.
The crime of Champerty is described as:-
“… the agreement to participate in the proceeds of civil litigation”.
It is described also as a common law misdemeanour. Reference is made by Cross and Jones on the same page, to “common barratry”, as the unjustifiable stirring up of litigation.
30. While the law on the issue has ancient roots, there are recent cases regarding maintenance and champerty.
31. Thus, in McElroy v. Flynn [ 1991] I.L.R.M. 294, the High Court, (Blayney J.) held that where a person undertakes actively to assist in the recovery of shares in an estate to which another person is entitled; an agreement whereby the former person will receive a percentage of the shares in the estate, is an agreement in the nature of champerty because it involves the plaintiff giving active assistance in the recovery of the defendants’ claims and it gave the plaintiff a share of the property recovered. Consequently it was contrary to public policy and was void.
32. In McElroy v. Flynn Blayney J. referred to a leading case, Rees v. De Bernardy [1896] 2 Ch 437, on champerty. There Romer J. held, at 446:-
“… the agreement induced by the defendant is one in the nature of champerty and void as being contrary to the policy of the law. It is not necessary in cases of this kind, in order that the agreement should be held void, that it should amount strictly in point of law to champerty or maintenance so as to constitute a punishable offence: see, amongst other cases, Reynell v Sprye 1 DM & G 660. In that case Knight Bruce L.J., with reference to the agreement there impeached, said:-
‘Such an understanding, such an agreement … may or may not have amounted strictly in point of law to champerty or maintenance so as to constitute a punishable offence, but must in my judgment be considered clearly against the policy of the law, clearly mischievous, clearly such as a court of equity ought to discourage and relieve against’.
33. In the High Court, in Fraser v. Buckle [1994] 1 I.R. 1, Costello J. stated at p. 13:-
“To examine the arguments advanced by the parties I think it would be helpful if I began by simplifying them by considering the general principles which should be applied to an heir-locator agreement which has been made in Ireland and which related to a share in an Irish estate. The general principles of the law of maintenance and champerty are easily ascertained and are not controversial. “Maintenance” has been defined as the giving of assistance or encouragement to one of the parties to an action by a person who has neither an interest in the action nor any other motive recognised by law as justifying his interference. “Champerty” is a particular kind of maintenance, that is maintenance of an action in consideration of a promise to give the maintainer a share in the subject matter or proceeds”.
34. Costello J. then quoted Lord Denning’s description of champerty in In re Trepca Mines Ltd. (No. 2) [1963] Ch. 199:-
“But there is one species of maintenance for which the common law rarely admits of any just cause or excuse and that is champerty. Champerty is derived from campi partitio (division of the field) It occurs when the person maintaining another stipulates for a share of the proceeds: (see definitions collected by Scrutton L.J. in Haseldine v. Hosken [1933] 1 K.B. 811, 831). The reasons why the common law condemns champerty is because of the abuses to which it may give rise. The common law fears that the champertous maintainer might be tempted, for his own personal gain, to inflame the damages, to suppress evidence, or even to suborn witnesses. These fears may be exaggerated; but, be that so or not, the law for centuries had declared champerty to be unlawful and we cannot do otherwise than enforce the law.”
35. In Fraser v. Buckle [1996] 1 I.R. 1, on appeal from the decision of Costello J., the issues of maintenance and champerty were addressed by the Supreme Court. McElroy v. Flynn [1991] I.L.R.M. 294, was approved and Rees v. de Bernardy [1896] 2 Ch 437 applied. The Supreme Court, in a judgment by O’Flaherty J., with whom Hamilton C.J. and Barrington J. agreed, held that the agreements in issue were champertous and unenforceable in law. The plaintiffs had entered into agreements with the defendants whereby the plaintiffs would reveal the identity of the deceased intestate in consideration of the defendants giving to the plaintiffs’ one third of any sum they might inherit. The defendants ultimately shared a sum of more than $750,000. They did not pay the plaintiffs the one third share on the basis that the agreements were unenforceable as being champertous, although they did accept that the plaintiffs were entitled to fees. The High Court had decided that the agreements were contrary to public policy and so unenforceable. The Supreme Court dismissed the plaintiff’s appeal and upheld the trial judge’s findings that the agreements were champertous and unenforceable in Irish law. O’Flaherty J. stated that the law on maintenance and champerty had not changed in this jurisdiction, upholding McElroy v. Flynn.
36. In Thema International Fund v. HSBC Institutional Trust Services (Ireland) [2011] 3 IR 654, the High Court (Clarke J.) held that the plaintiff was in receipt of some form of third party funding. The High Court stated:-
“However, I am also satisfied on the evidence that any funder has a sufficient connection with the plaintiff so as to take that funding outside the scope of maintenance and/or champerty.”
The High Court pointed out, further at 663:-
“However, a third party funder who is not guilty of champerty (i.e. who has the sort of legitimate interest in the case identified in the champerty jurisprudence) is, in my view, in a different situation. They are, even if only indirectly, already involved in the litigation. Any company which lacks funds always has the possibility that its shareholders (or its creditors) may choose to provide further funding for a whole range of reasons not confined to potential litigation. Commercial judgment will often lead to parties with a direct interest in a particular enterprise investing further sums. There is, therefore, in my view a substantial difference between a party who already has an indirect link to the impecunious party and who has, therefore, already got an indirect interest in the relevant litigation, on the one hand, and a party with no such prior link who simply buys into the litigation on the other hand. A party in the position of HTIE must be aware that shareholders in or others with an indirect interest in Thema may well chose to fund Thema so as to enable it to pursue litigation which is in Thema’s interests but which will also, potentially, indirectly benefit them by increasing the value of the shareholding in Thema or permitting Thema to pay its lawful obligations.”
37. The obiter in the above case may be distinguished from the facts of the appeal before the Court, as the funder there was held to have had a sufficient connection with the plaintiff. That is not the case between the funder and the plaintiffs in this action. This case raises the single issue as to whether the professional funding agreement is contrary to public policy, and is champertous.
38. There is no doubt that the offence and tort of champerty are extant in Ireland.
39. The Law Reform Commission, referred to as “the LRC”, has published an Issues Paper on “Contempt of Court and other offences and torts involving the administration of Justice”, (LRC IP 10 - 2016). In its overview it states:-
“The crime, and tort, of maintenance occurs where a third party supports litigation without just cause. Champerty is an “aggravated form” of maintenance where the third party supports litigation without just cause in return for a share of the proceeds”. (Greenclean Waste Management Ltd. v. Leahy p/a Maurice Leahy & Co. Solicitors (No. 2) [2014] IEHC 314).
40. Thus, while both the tort and offence of champerty are still law in Ireland, the boundaries of the tort and offence are relevant to this appeal.
41. The LRC has looked at the issues of maintenance and champerty in other common law jurisdictions. It points out that the Criminal Law Act, 1967, abolished the crimes and torts of maintenance and champerty in England and Wales. As in England and Wales, many other States have abolished the torts and crimes of maintenance and champerty, and thus their case law is of less relevance to the situation in Ireland, where the crimes and torts of maintenance and champerty still exist. As the LRC pointed out:-
“6.17. The retention of the torts and crimes of maintenance and champerty in Ireland affects a number of different areas ranging from the validity of so-called “heir-locator” agreements to the legitimacy of professional third party funding of litigation”.
42. In essence, the issues before the Court are: do the tort and crime of champerty exist in Irish law? What are the parameters of the tort and offence of champerty? Is the professional funding agreement of the plaintiffs champertous?
43. In Fraser v. Buckle Costello J. said that a helpful summary of the law and the reasons why champertous agreements are contrary to law may be found in Trepca Mines Ltd (No. 2) (1963) Ch. 199 where Lord Denning MR stated at p. 13:-
“The reasons why the common law condemns champerty is because of the abuses to which it may give rise. The common law fears that the champertous maintainer might be tempted, for his own personal gain, to inflame the damages, to suppress evidence, or even to suborn witnesses. These fears may be exaggerated; but, be that so or not, the law for centuries had declared champerty to be unlawful and we cannot do otherwise than enforce the law.”
44. This statement was approved by Lynch J. in O’Keeffe v. Scales [1998] 1 I.R. 290 at 295 Lynch J. held:-
“A person who assists another to maintain or defend proceedings without having a bona fide interest independent of that other person in the prosecution or defence of those proceedings acts unlawfully and contrary to public policy and cannot enforce an agreement with that other person for any form of benefit.”
45. Counsel for the plaintiffs brought Saunders v. Houghton [2010] 3 NZLR 331 to the attention of the Court. The New Zealand High Court struck out part of the claim but confirmed that one of the shareholders could sue in a representative capacity; dismissed an application for a stay brought on the grounds that the litigation funding and management agreement was an abuse of process; and declined to strike out the claim for breach of fiduciary duty.
46. Unruh v. Seeberger [2007] HKCFA 9, was also brought to the attention of the Court. This Hong Kong case contains a very interesting discussion on champerty in the judgment of Ribeiro P.J. He discusses what the public policy in champerty involves. At para. 119 he stated:-
“The continued retention by Hong Kong of criminal and tortious liability for maintenance and champerty may not be justified and this question merits serious legislative attention.”
However, the Court did not seek to impose the public policy of Hong Kong on mature commercial parties (who are likely to include foreign entities) who have chosen to arbitrate in a jurisdiction which does not recognise the concepts and who may have made arrangements in Hong Kong to finance the arbitral proceedings without being aware of any constraints.
47. It has been well recognised that contracts of a champertous nature relating to other jurisdictions may be lawful. As Denning M.R. said in In Re Trepca Mines Ltd (No. 2) [1963] Ch. 199 at 218:-
“If they had concerned French litigation, they might have been lawful, because I understand champerty is lawful in France”.
Similarly, in Giles v. Thompson [1993] 3 ALL ER 321 at 332 Lord Steyn L.J.
stated:-
“An agreement of a champertous nature made in England is valid if it relates to litigation in a country where champerty is lawful. This illustrates that one is not dealing with an overriding public policy, which applies wherever the agreement is made or to be performed, such as an agreement to pay a bribe abroad. It is designed to protect the integrity of the English judicial system.”
48. Consequently, in Unruh the champerty argument advanced on the appellants’ behalf failed on the above ground also. It was held:-
In addition, Unruh may be distinguished as there is no doubt that Mr. Unruh had an independent interest in the outcome of the litigation.
49. In Greenclean Waste Management Limited v. Maurice Leahy Practising under the style and title of Maurice Leahy & Co. Solicitors (No. 2) [2014] IEHC 314, Hogan J. considered that the law as to maintenance and champerty must be viewed in accordance with modern ideas of property. However, as stated by Lynch J. in O’Keeffe v. Scales [1988] 1 I.R. 290, the law relating to maintenance and champerty still exists in the State. And, as O’Flaherty J. held in Fraser v. Buckle [1994] 1 I.R. 1 , the law on maintenance and champerty has not undergone any sea change in this jurisdiction since the 19th century.
50. Recently, in SPV Osus Ltd v. HSBC International Trust Services (Ireland) Ltd [2015] IEHC 602, where the issue was an assignment of claim agreement, the High Court (Costello J.) stated at para 40:-
“Professional third party funders who make a commercial decision to ‘invest’ in litigation in the hope of making a profit commit the torts of either maintenance and/or champerty”.
And in the Court of Appeal, Ryan P., at paragraph 34, gave the following description:-
“The general understanding which is not in dispute is that champerty is a variety of maintenance, in fact a more severe or heinous version. Broadly speaking, maintenance is interfering in litigation by supporting it financially without having any legitimate interest in the case which could justify the interference. Champerty is taking a share in the outcome of the case in return for funding it.”
51. (i) In Thema International Fund v. HSBC Institutional Trust Services (Ireland) [2011] 3 IR 654, during case management of the case, the defendant applied for orders requiring the disclosure of the plaintiff’s funding for the purposes of the litigation. The Court accepted that the plaintiff was in receipt of some form of third party funding. However, the Court held that the funders had a legitimate interest in the litigation. Hence, this is a case of an exception to the general rule on champerty. Clarke J. held at para. 11:-
“However, I am also satisfied on the evidence that any funder has a sufficient connection with the plaintiff so as to take that funding outside the scope of maintenance and/or champerty”.
51. (ii) Case law from other jurisdictions was quoted to Clarke J. He held in para. 22:
“I am not satisfied that case law from other common law jurisdictions which post dates a change in the law in relation to maintenance and champerty (whether by judicial decision or by statute) is of great assistance in determining the extent of the court’s jurisdiction to order disclosure at an early stage of a third party funder in a jurisdiction such as Ireland where maintenance and champerty remains the law. Here the situation is very different. In Ireland it is unlawful for a party without an interest (or some other legitimate concern including charity) to fund the litigation of another at all and, in particular, it is unlawful to fund litigation in return for a share of the proceeds. The only form of third party funding which is, therefore, legitimate in Ireland is one which comes within the exceptions to maintenance and champerty.”
51. (iii) The High Court pointed out further, at paragraph 26:-
“However, a third party funder who is not guilty of champerty (i.e. who has the sort of legitimate interest in the case identified in the champerty jurisprudence) is, in my view, in a different situation. They are, even if only indirectly, already involved in the litigation. Any company which lacks funds always has the possibility that its shareholders (or its creditors) may choose to provide further funding for a whole range of reasons not confined to potential litigation. Commercial judgment will often lead to parties with a direct interest in a particular enterprise investing further sums. There is, therefore, in my view a substantial difference between a party who already has an indirect link to the impecunious party and who has, therefore, already got an indirect interest in the relevant litigation, on the one hand, and a party with no such prior link who simply buys into the litigation on the other hand. A party in the position of HTIE must be aware that shareholders in or others with an indirect interest in Thema may well chose to fund Thema so as to enable it to pursue litigation which is in Thema’s interests but which will also potentially, indirectly benefit them by increasing the value of the shareholding in Thema or permitting Thema to pay its lawful obligations.
51. (iv) While the judgment of Clarke J. is partly obiter, it reflects the well rehearsed law on champerty in decisions of the High and Supreme Court over the last forty years. Thus, it should be given considerable weight.
52. The LRC in its Issues Paper on Contempt of Court and other offences and torts involving the administration of justice, (LRC IP 10 - 2016), has noted that:-
(a) In light of the importance of providing access to justice, it is certainly arguable that legislation should be introduced to allow for third party funding of litigation by person or body who does not have a legitimate interest in the proceedings. [6.33]
(b) In England and Wales third party funding is permitted by statute, and is governed by a non-statutory Code of Conduct for Litigation Funders. In England and Wales a particular concern in connection with third party funding is that funders sometimes influence or attempt to influence, the direction of proceedings, for example through the selection of experts or by trying to influence settlement discussions. [6.34]
(c) Third party funding has been permitted in Australia. [6.35]
(d) The Law Reform Commission of Hong Kong published a consultation paper in 2015 proposing that third party funding for arbitration should be permitted and should not be regarded as champerty or maintenance. [6.36]
Conclusion
53. I am satisfied that the appeal should be dismissed.
54. (i) This investment agreement, is an agreement by HF3 to fund the plaintiffs’ case. HF3 have no connection with the plaintiffs, apart from an agreement to fund their proceedings. It is, thus, a champertous agreement as described in case law by the High Court and this Court over the last four decades. It is not an exception as permitted by law for such an agreement.
54. (ii) While the statutes of the 14th Century, 1540 and 1634 were declaratory of the common law, the common law has been stated clearly in recent cases, such as by Costello J. in Fraser v. Buckle [1994] 1 I.R. 1, by Lynch J. in O’Keeffe v. Scales [1998] 1 I.R. 290, by Costello J. in the High Court in SPV Osus Ltd v. HSBC International Trust Services (Ireland) Ltd [2015] IEHC 602 at para 40; by Ryan P. in the Court of Appeal; and by Clarke J. in Thema International Fund v. HSBC Institutional Trust Services (Ireland) [2011] 3 IR 654.
54. (iii) Champerty remains the law in the State. It has been described clearly in recent cases. A person who assists another’s proceedings without a bona fide independent interest acts unlawfully.
54. (iv) The case law of other common law jurisdictions it is not very helpful given the clear statements on the law. In this State the proposed Investment Agreement is a funding agreement which is champertous, and hence it is unlawful. It is an agreement within the State and hence Irish law applies.
54. (v) It was argued that this Court could develop the common law on champerty in light of modern policy and constitutional issues. As to policy issues, this would involve complex situations more suited to legislation, after the benefit of an LRC Report. As to constitutional issues, this was not brought as a constitutional challenge. Clearly, constitutional issues have been parked by the plaintiffs, perhaps for another day.
54. (vi) The Court was asked not to be seduced into changing the law in the interests of what the Court may perceive to be just. It may be said that in light of modern issues, such as Ireland being an international trading State, issues arising on international arbitrations, and in the Commercial Court, it might well be appropriate to have a modern law on champerty and the third party funding of litigation. However, that is a complex multifaceted issue, more suited to a full legislative analysis. This is re-enforced by the retention of the old statutes by the Act of 2007, and by the work of the LRC.
54. (vii) However, I do have a concern that the defendants and third party who vigorously opposed the plaintiffs’ motion are beneficiaries if the case does not proceed. This may be a matter for consideration at another time and place. There is a long history at the Bar, and amongst solicitors, of taking cases on a “no foal no fee” basis. Many of the most important cases have been taken in such circumstances. Or, perhaps an alternative route may be found, whereby the litigation would cost less.
54. (viii) The issues raised by the plaintiffs are issues for the Oireachtas, where parameters may be established, and the law developed, but not in an ad hoc, piecemeal, method.
54. (ix) The issue on which the Court permitted leave to appeal was:-
“Whether third party funding, provided during the course of proceedings (rather than at their outset) to support a plaintiff who is unable to progress a case of immense ‘public importance’ is unlawful by reason of the rules on maintenance and champerty.”
I do not find the fact that the funding was provided during the course of the proceedings a relevant factor. Nor do I consider the fact that the case is described as one of immense public importance to be a relevant factor. However, I do consider that third party funding to support a plaintiff (where none of the exceptions apply) is unlawful by reason of the rules on champerty. None of the exceptions arise in this case.
54. (x) Consequently, I would dismiss the appeal.
I agree with the concurring judgments of Clarke J., MacMenamin J., and Dunne J.
Judgment of Mr. Justice Clarke delivered the 23rd May, 2017.
1. Introduction
1.1 I fully agree with the judgment delivered by the Chief Justice in this matter and with the resolution which she proposes for this appeal. I also agree with the observations of MacMenamin and Dunne JJ. My purpose in writing this concurring judgment is to make a number of observations of my own about access to justice in modern circumstances. It is, of course, access to justice which lay at the heart of the principal argument put forward on behalf of the plaintiffs/appellants (“Persona”) in suggesting that this Court should revisit the parameters of the law of champerty.
1.2 However, before so doing I would observe that, in my view, one of the most powerful arguments put forward against a radical change in the law of champerty (in the absence of legislation) was that advanced by Mr. Niall Buckley, counsel for the third party. Mr. Buckley argued that there were strong, and importantly modern, considerations which lay against permitting third party funding not least what he described as the potential risks inherent in the commoditisation of litigation. While those who have sought to disparage the law on champerty have frequently referred, correctly so far as it goes, to its medieval origins, those arguments demonstrate that there are important current and modern considerations which would need to be balanced very carefully in any analysis which might lead to a change in the law in this area. It is for reasons such as those that I fully support the reasoning of the Chief Justice which leads to the conclusion that it would be for this Court to engage, impermissibly, in legislation if it were to take onto itself the task of radically changing the law in this area.
2. Some Observations
2.1 However, it is difficult to take an overview of the circumstances of this case without a significant feeling of disquiet. Serious allegations are made against the State and others. Indeed in a previous judgment delivered by me in an appeal brought in these and related proceedings (Comcast International Holdings Inc. & ors v. Minister for Public Enterprise & ors [2012] IESC 50), I suggested that should the allegations made come to be proven in a court of competent jurisdiction they would amount to amongst the most serious factual findings that would have been made by a court in this jurisdiction since the foundation of the State. In addition, given the findings of the so-called Moriarty Tribunal, there is at least a basis for suggesting that the allegations might be capable of being established. It would, of course, be for the trial court to consider whatever evidence may be presented, apply the rules of evidence and its own judgment to all of the materials properly before the Court, and come to a conclusion in accordance with that evidence and the law.
2.2 However, the source of disquiet which arises on this appeal stems from the very real possibility that this case might not go to trial because of the difficulties encountered by the plaintiff/appellant (“Persona”) in being able to run the case without third party funding. It is in that context that I feel that a number of observations are required.
2.3 In M.C. v. The Legal Aid Board [1991] 2 I.R. 43, Gannon J., in dismissing a claim to an entitlement to legal aid in nullity proceedings, suggested that there was no obligation on the State to intervene in private civil disputes. In so doing Gannon J. said that he was “not convinced that there is any provision in the Constitution which imposes a duty on the State to provide any form of support for civil litigation among citizens”.
2.4 The types of measures which have, in the past, been found to operate as a barrier to the constitutional right of access to the courts were formal legal requirements such as the fiat of the Attorney General which was required to bring the type of action concerned in McCauley v. Minister for Posts & Telegraphs [1966] I.R. 345. Such a requirement was found to be an infringement of the right of access to the court.
2.5 It is, however, worth noting that Lardner J., in Stephenson v. Landy & ors (unreported, High Court, Lardner J. 10th February 1993), considered that the constitutional regime applicable to legal aid in criminal cases, which was explained by this Court in The State (Healy) v. Donoghue [1976] I.R. 325, had the potential to apply, mutatis mutandis, to wardship proceedings because they involved the State. While there have, therefore, been some indications that the right of access to the courts in at least some types of cases (certainly criminal cases and possibly some other forms of case involving the State) may involve certain obligations on the State to ensure adequate representation, it would, I think, be fair to say that to date the right of access to the Court has arisen more in the context of formal legal barriers rather than practical matters including resources and representation.
2.6 Given that submissions based on the right of access to the courts formed an important part of the case put forward on behalf of Persona it is, I think, appropriate to indicate that, in my view, there may well be an argument that, in modern circumstances, it may be necessary to consider whether the right of access to the Court needs to be looked at on a broader basis which may, at least in some cases, require consideration of whether that right is, in practise, effective even though there may be no formal barrier to its exercise. As this case was not argued in that way it would be wrong to express any concluded view. Furthermore, to the extent that the argument may involve practical questions, it is doubtful if there was sufficient material before the Court on which any meaningful conclusions could have been reached in any event. However, it would, in my view, be remiss not to at least make some comments on the issue.
2.7 As the Chief Justice has pointed out at para. 52(vii) of her judgment, the most common way in which litigation on behalf of insufficiently resourced parties has been conducted in the State has been by means of individual lawyers making a decision to represent clients without any guarantee of payment either in pure pro bono cases or, more frequently, under the so-called “no foal no fee” system. It does have to be recognised that the latter system has provided, in the past, an effective means of representation in at least many types of cases. A great deal of personal injury litigation, including difficult cases such as complex clinical negligence proceedings, are still brought on that basis. Furthermore, certain types of cases involving the State and its agencies, including judicial review, are frequently maintained in that way. This is a matter to which I will shortly return.
2.8 However, there are a number of factors which do need to be taken into account in any overall assessment of the extent to which it might be said that there is effective access to justice today. The following is not necessarily an exhaustive list but seems to me to represent some of the most significant features.
(a) It is clear from even a brief perusal of the figures produced by various international bodies concerning the number of judges in various jurisdictions and the cost to the taxpayer in those jurisdictions of funding the justice system generally, that the figures for number of judges and general cost are very significantly lower in common law countries compared with comparable figures from the civil law world. It may not be quite so easy to estimate the degree of difference with a great deal of precision for the figures are not necessarily compiled on exactly the same basis in each jurisdiction. For example, certain types of disputes are dealt with by tribunals in some countries but courts in others. What exactly counts as a court may differ somewhat from jurisdiction to jurisdiction. Numbers can be affected by the existence of, for example, persons such as the lay magistrates who still exercise considerable jurisdiction in the United Kingdom. For these, and doubtless other, reasons a precise comparison is not possible. But the position of common law countries at the bottom of the scale is so pronounced that it cannot really be doubted but that the resources applied to the courts system are significantly less in common law countries with consequential major savings to the taxpayers in those countries.
(b) The reason for this is, of course, fairly obvious. A much greater part of the burden of ascertaining the facts and researching the law lies on the parties in a common law system. In almost all types of common law litigation it is for the parties to produce the evidence which leads to findings of fact. That can include procuring the attendance of expert witnesses as well as witnesses of fact. Furthermore, the parties have the job of researching the law and of informing the Court of any legal materials which might be relevant to the Court’s consideration. Unlike their counterparts in civil law jurisdictions, Irish judges do not have access to research departments and only, and then only in recent times, to a very small number of legal researchers. It is striking that each of the more than 80 judges who serve on the Slovakian Supreme Court have two researchers whereas the nine judges who serve on the Irish Supreme Court are forced to share a researcher between each two. The consequence of that sort of situation is that there are significant limitations on the extent to which the Court can do its own research and, thus, the practise which requires the parties to fill that gap.
(c) It would not be possible to reach any definite conclusion on such mattes without adequate evidence and there are, doubtless, other factors which affect the cost of litigation both in common law countries generally and Ireland in particular but there is at least a very strong arguable case that part of the reason, and most likely a significant part, is the fact that there is a transference of the burden of carrying the litigation from the Court to the parties such that the taxpayer saves a great deal of money but at the cost of litigants. If such facts were to be established there would, in my view, be at least an argument that they would need to be taken into account in assessing whether there is effective access to justice.
(d) It is also the case that litigation has become more complex. There are a whole range of reasons for this. Legislation, both domestic and European, has become increasingly complicated. The areas of regulation are much greater. The detail of the measures adopted are voluminous. In the context of certain types of cases, the presence of very large volumes of electronically stored information which might, at least on one view, have a bearing on the just outcome of the proceedings, can make an analysis of the facts all the more difficult. It seems to me that two consequences flow from this.
(e) First it is at least arguable that the increasing complexity of litigation has led to a corresponding increase in the difficulty which an unrepresented party would have in being able to represent themselves in any meaningful way in at least certain types of cases. It may well be the case, of course, that there remain cases which a litigant in person who chooses to inform themselves on relatively straightforward legal questions might be able to “do their own case”. In such cases it might be said that there would be an advantage to having skilled legal representation but the fact that it might be advantageous to secure the services of an experienced advocate does not, necessarily and in and of itself, mean that a party could not at least make a reasonable attempt at doing the case themselves. However, there is a very real likelihood that the increasing complexity of litigation has placed many more cases outside the scope of effective self-representation. That certainly is the experience of many judges. These are not just cases which might be run better by an experienced advocate but rather cases which cannot, in any meaningful or true sense, be run at all without legal assistance. How, for example, could a litigant in person without legal assistance comply with detailed obligations of disclosure including issues of privilege and the like in a case involving a great deal of documentation? It follows that it may well be the case that there has been a very material increase in the number and type of case where the undoubted right to run the case as a litigant in person might be argued not to represent effective access to the Court in any meaningful sense.
(f) But there is another consequence of the increasing complexity of litigation. It is one thing for lawyers to be prepared to take on relatively short litigation at the risk that they will not be paid unless they are successful. A business model, if that is how one might term it, which took on the risk that some work throughout the year will not be remunerated, may nonetheless prove economically viable provided that the downside risks are not too great. But the increasing complexity of litigation can undoubtedly lead to situations where there are two significant inroads into the effectiveness of that model. First the more of the lawyer’s time and effort which has to go into a case in which there is no guarantee of payment the bigger the risk. The extent to which it makes economic sense to take on risk, in at least some types of cases, must come into question.
(g) Furthermore, there are many types of case where bringing the litigation to the door of the Court not only requires effort on the part of the lawyers but also significant expenditure. It is one thing to take on the risk that one will not be paid for a period in time. It is an altogether greater risk if the consequences of losing, and not, therefore, getting an order for costs against a mark, is that the lawyer concerned (in such circumstances normally a solicitor) has incurred very significant personal expense which will now be lost. Many discovery projects involve the employment of a large number of young lawyers to sift through a great deal of documentation (frequently much of it electronic) for the purposes of identifying relevant materials and dealing, at least initially, with questions of privilege and the like. Many of the young lawyers concerned take on that work because it provides some guaranteed income in their early years of practice. It would be wholly unrealistic to expect such young lawyers to do that kind of work on the basis that they would only be paid if the litigation were successful. But a consequence of that fact is that someone must pay them. For an impecunious party that means that a lawyer agreeing to take such a case on a “no foal no fee” basis will be required to fund the discovery process at the risk that that money will be lost in the event that there is not an effective order for costs at the end of the day. Like comments could be made about procuring expert evidence. All of this means that there must be a significant risk that the “no foal no fee” system, at least in its current form, may increasingly prove to be less effective in providing access to justice in practise.
(h) All of the above analysis is designed to demonstrate that it is at least arguable that there is a very real problem in practise about access to justice. An assessment of the precise extent of the problem would require detailed evidence and, therefore, nothing which I say should be taken as indicating a concluded view. Nonetheless it is worth recording that the experience of the courts suggests that there may well be problem, that it may well be significant and that there are at least arguable grounds for suggesting that it is growing.
2.9 I consider that it can be said that there is at least an arguable case that the constitutional right of access to the court may include an entitlement that that right be effective, not just as a matter of law and form, but also in practise. If that be so there may well be an argument, based on the above analysis, that there is an increasing problem emerging in relation to that constitutional entitlement. But the real question which arises in this case is as to whether the possibility that there might be a finding that there is an impairment, at least in some cases and in some circumstances, of the constitutional right of access to the courts based on the sort of considerations on which I have touched, could lead to the Court altering the parameters of the law of champerty.
3. Implications for the Law of Champerty
3.1 For the purposes of the argument, and only on that basis, I will in this section of this judgment assume that it can be established that there is an impairment of the constitutional right of access to the court which stems from the fact that there are at least some cases where the right is impermissibly interfered with by virtue of it not being possible, for resources type reasons, to exercise the right in practice to any reasonable extent. What then might the consequences be for the law of champerty?
3.2 The problem, of course, is that there are many ways in which such difficulties might be alleviated. Legal aid is one. Adjustments to “no foal no fee” or conditional fee type arrangements might be another. Changes in the balance between the obligations of the parties and the resources provided by the Court might be a third. Clearly some form of legitimate third party funding could be a fourth. Doubtless there might be other possibilities or, indeed, combinations of some or all of those already mentioned.
3.3 Each of those potential solutions brings its own problems. Civil legal aid, particularly in a common law country, can be very expensive for the taxpayer. Indeed, it would appear that some of the measures in favour of third party funding adopted in other countries have been designed precisely to reduce the burden on the taxpayer of funding an adequate civil legal aid system.
3.4 Allowing for different types of financial arrangements between lawyers and their clients runs the risk of giving rise to exactly the same kind of problems which were relied on by the State in arguing against third party funding on this appeal. Furthermore, such measures might lead, depending on how the model was implemented, to inequalities whereby an impecunious plaintiff might have to give over to their lawyers some of the award to which a court had found them to be entitled as a matter of law, while a well resourced plaintiff might not be so obliged. Doubtless other problems might well be identified depending on the precise model adopted.
3.5 A recalibration of the role of the parties and the Court might, of course, form part of any solution but, as the figures for court funding to which I have already referred demonstrate, that would almost certainly come at a significant cost to the taxpayer. Adjusting for the relative populations of the two countries it is illustrative to note that, were Ireland to have the same number of judges per head of population as Germany, Ireland might have something of the order of 1,250 judges. Between all courts we have a total of under 170. Moving to a more civil law type litigation system might well save parties a lot of money, might solve problems about legal aid and the like, but it can readily be anticipated that it would come at a very significant cost indeed to the taxpayer.
3.6 The policy problems associated with third party funding were well explored in this case and there is no need to repeat them here.
3.7 There is, therefore, no pain-free solution to the problem. But it follows that the choice of solution is very much a matter of policy and, at least initially, not one in which the courts can properly have any involvement having regard to the Separation of Powers. It follows in turn that, even if a court were to be satisfied that there was a sufficient diminution, in practise, in the right of access to the Court to warrant a finding of a breach of constitutional rights, it would not necessarily follow that the solution would be to materially change the law of champerty. As noted earlier any one of many possible solutions might be adopted or indeed a combination. It is for that reason that I fully agree with the Chief Justice’s conclusion that the choice of policy solution is very much a matter for the legislator or the Executive and not for the Court.
4. A Final Observation
4.1 However, I would add one caveat. It has long been said that the courts must act to find a remedy in any case where there is a breach of constitutional rights. While the choice, as a matter of policy, between a range of possible ways in which a potential breach of constitutional rights might be removed is fundamentally a matter for either the Oireachtas or the Executive, it may be that circumstances could arise where, after a definitive finding that there had been a breach of constitutional rights but no action having been taken by either the legislature or the government to alleviate the situation, the courts, as guardians of the Constitution, might have no option but to take measures which would not otherwise be justified.
4.2 For such a situation to arise it would, of course, be necessary for a court first to conclude that there was, in fact, a breach of constitutional rights established. That would require a consideration of the legal issues which might arise surrounding the extent to which the constitutional right of access to the Court extends to matters which may, in practise although not as a matter of law, significantly impair the effectiveness of the right. Such a conclusion would also require a detailed analysis of the factual situation in modern conditions.
4.3 However, if a breach were to be established and a court were to so hold, it would clearly be appropriate for the Court to afford the Oireachtas and/or the Executive an opportunity to decide what the best solution might be. If, however, in such circumstances no action whatsoever was taken (or action which clearly was insufficient to meet whatever requirement had been identified) then there might very well be a strong argument that the Court’s jurisdiction would necessarily have to extend to taking whatever measures were necessary.
4.4 Where there is a constitutional problem and policy choices as to its solution, then it is clearly for the Oireachtas and/or the Executive to choose which possible answer should be adopted. But there are strong grounds for believing that there cannot, in those circumstances, just be no answer.
Judgment of Mr. Justice John MacMenamin dated the 23rd day of May, 2017
1. I agree with the judgment of the Chief Justice. I would, however, like to make some brief observations.
2. The first of these is that the allegations contained in this claim are undoubtedly very serious. At the same time it is important to remember that the defendants, the notice party and Esat Digifone have denied that there was any wrongdoing.
3. In her judgment delivered today Dunne J. addresses some of the considerations which might tend to indicate that there is at least, an arguable case that maintenance and champerty have fallen into disuse. Thus it may be said a question arises as to whether either were carried forward by the enactment of the 1937 Constitution. This question must, however, be seen from the standpoint of the legal authorities cited by the Chief Justice in her judgment.
4. Mr. Neill Buckley, B.L. made a series of interesting submissions on behalf of the fourth named defendant. In the course of these he drew the Court’s attention to a number of scholarly articles which raised issues about the unforeseen consequences of third party funding.
5. It may be true that such third party funding can enhance access to justice and foster development of the law but there are, also other consequences. Should law cases which have a strong individual “personal rights” dimension be capable of assignment to a funder or open to some kind of profit sharing arrangement? One of the historical objection to maintenance and champerty was the risk of the perversion of justice. Perhaps that concern is less now. More modern concerns may involve the complexities of multi party actions perhaps of low social value, which might have the effect of creating difficulties in already busy court lists. There may be problems as to how to deal with cases with a multiplicity of plaintiffs, some with highly meritorious cases, and others less so. Not all parties will be deserving of the same level of damages in such cases. In those circumstances who will be the arbiter if some parties settle a claim and others do not?
6. There are, too, broader “regulatory” issues. Among these lie the questions as to whether third party funders should themselves be regulated in law, and whether there should be statutory limits on the level of recovery. Who should bear responsibility for adverse costs orders?
7. Clearly, therefore, significant policy questions might arise in the event of a finding of unconstitutionality in the case of maintenance and champerty. But legislation takes time. All these are matters for another day, and, perhaps, for the legislature rather than the courts.
8. A number of issues were left unresolved in this application. It is unclear whether the plaintiffs might still be in a position to obtain solicitors and counsel who might undertake this case without a guarantee of remuneration. However, an objective appraisal of the case would indicate that the proceedings would be long and complex.
9. Further points also remain open-ended. In the course of argument the question arose of a hypothetical situation in which the funders might actually acquire a shareholding in the plaintiff companies, with the intention of procuring adequate funds to process the litigation. This remains unresolved. There may, too, be other avenues which the parties may wish to explore arising from the highly unusual, if not unique, nature of this litigation. That is a matter for themselves.
10. Finally, it is worth making the observation that the laws of defamation are not the only legal route whereby parties, be they plaintiffs, defendants or notice parties, can vindicate their right to a good name. Other forms of action may achieve a similar result.
Judgment of Ms. Justice Dunne delivered on the 23rd day of May, 2017.
I agree with the judgment of Denham C. J. just delivered. I wish to make some short observations about the offences of champerty and maintenance which remain part of Irish law by virtue of the Statute Law Revision Act 2007 (“the Act of 2007”).
S. 2 (1) of the Act of 2007 provided for the repeal of all statutes enacted before 6th December, 1922 then in force save for, inter alia¸ those specified in Schedule 1 of the Act of 2007 which concerns pre Union Irish Statutes. Schedule 1 lists as one of the Statutes retained the Maintenance and Embracery Act 1634 (1634 (10 Chas. 1 sess. 3) c. 18) (“the Act of 1634”). Also retained was a Statute of England of an uncertain date of the 14th Century, namely, the Statute of Conspiracy (Maintenance and Champerty) as set out in part 2 of the Second Schedule together with the Maintenance and Embracery Act 1540 (1540 (32 Hen. 8) c.15).
Section 3 of the Act of 1634 is set out in the judgment of Denham C. J. (at para. 23) but, for ease of reference, I will set it out here:
“That no manner of person or persons, of what esteate, degree or condition soever he or they be, doe hereafter unlawfully maintaine or cause or procure any unlawful maintenance in any action, demaund, suite or complaint in any of the Kings courts of the chancery, castle-chamber, or elsewhere within this his Highnesse Realme of Ireland … and also, that no person or persons of what estate, degree, or condition soever he or they be, doe hereafter unlawfully retaine for maintenance of any suit or plea any person or persons, or embrace any free-holders or jurors, or suborne any witnesses by letters, rewards, promises, or any other sinister labour or means for to maintaine any matter or cause, or to the disturbance or hinderance of justice, or to the procurement or occasion of any manner of perjury by false verdict or otherwise in any manner of courts aforesaid” .
What then is the offence of maintenance and the offence of champerty? Denham C. J. in her judgment (at para. 29) referred to the definitions of these offences to be found in Cross and Jones, An Introduction to the Criminal Law, 4th Ed., (London, 1959) (at p. 294).
Archbold’s Pleading, Evidence and Practice in Criminal Cases, 32nd ed., (1949) gives the following definitions at (p.1280):
“Champertors be they that move pleas or suits or cause to be moved either by their own procurement or by others, and sue them at their proper costs for to have part of the land in variance, or part of the gains: 33 Edw. 1 (Ordinacio de Conspiratoribus).”
and
“Maintenance is said to consist in the unlawful taking in hand or upholding of or assisting in civil suits, or quarrels of others, to the disturbance of common right, and from other than charitable motives.”
Ryan and Magee in The Irish Criminal Process (Dublin, 1983), in their Table of Indictable Offences and Penalties, lists champerty as an offence at common law punishable by imprisonment or a fine, as is maintenance.
In the course of their written submissions, Counsel on behalf of the Appellants posed the question (at para. 72), “When, for example, was someone last prosecuted under the doctrines?” It appears to be the case that since the foundation of the State, no prosecution has been brought against anyone in respect of the offences of maintenance and champerty.
It is undoubtedly the case that champerty and maintenance are torts which remain part of the common law in this jurisdiction as stated in the judgment of Denham C. J. and as reflected in a number of judgments opened to the Court on this appeal. However, no modern day statute defines the offence of champerty or maintenance. What are the ingredients of the offence? By looking at the case law in this jurisdiction, one can tell what types of arrangements may fall into the category of being champertous or amount to maintenance from the point of view of tort law. Could one say with certainty that a particular arrangement is an offence?
Denham J. (as she then was) addressed a similar issue in the case of Attorney General v Hilton [2005] 2 IR 374 (“Hilton”) where she said (at p. 381):
“In criminal law the constituent parts of offences should be clear. The law must be certain. If there is ambiguity, it is rendered to the advantage of an accused. It is a fundamental principle that the criminal law must be clear and certain. The constituents of an offence must be clear and certain. The ‘possibility’ that such an offence exists in our common law is insufficient clarity of the situation. The ambiguity as to its constituent parts is relevant. These are most relevant factors.”
That was a case which arose in the context of extradition which involved an individual who was sought for prosecution in England for the offence of cheating the public revenue at common law. The Supreme Court considered whether there was a corresponding offence in this jurisdiction. There had been a reference to such an offence in the Criminal Justice (Theft and Fraud Offences) Act 2001, which stated (at section 3(2)):
“Any offence at common law of larceny, burglary, robbery, cheating (except in relation to the public revenue), extortion under colour of office and forgery is abolished.”
Denham J. continued (at p.381):
Another interesting case is Corway v Independent Newspapers (Ireland) Ltd. [1999] 4 IR 484 (“Corway”) which concerned a possible prosecution for blasphemous libel. Section 8 of the Defamation Act 1961 provided that no such criminal prosecution could be brought against a newspaper without leave of a judge of the High Court. The newspaper was represented on an application for leave to prosecute which was refused by the High Court. (At issue was a cartoon, published following the 1995 divorce Referendum, depicting a priest and three politicians.) On appeal to the Supreme Court, it was held, inter alia, that in the current state of the law and in the absence of any legislative definition of the constitutional offence of blasphemy, it was impossible to say of what the offence of blasphemy consisted. Barrington J. in the course of his judgment commented that (at p. 502):
“The task of defining the crime is one for the legislature, not for the courts. In the absence of the legislation and in the present uncertain state of the law, the Court could not see its way to authorising a criminal prosecution for blasphemy against the respondents.”
It goes without saying that criminal offences ought to be clearly defined and legislative provisions which fall short in this regard will not stand scrutiny. One is entitled to know that if one commits a particular act it is a crime and could lead to a criminal sanction.
The offences at issue in the case of Hilton and Corway referred to above had not resulted in prosecutions for upwards of a hundred years. In the case of champerty and maintenance, there have been no prosecutions since the foundation of the State and possibly longer, but there have been a number of cases on the civil side of the courts which have considered the place of these torts in our law. However, the arguments in this case did not engage with the status of the criminal offences. Denham C. J. noted in her judgment (at para. 10) quoting from the judgment of the learned trial judge delivered on 20th April, 2016 ([2016] IEHC 187):
“86. It is important to recall that, the application before the Court is not a constitutional challenge; the Court has not been asked to examine the constitutionality of the offences and torts of maintenance and champerty and no declaration of unconstitutionality has been sought. The resolution of any issues regarding constitutional rights, including access to justice or indeed whether these ancient torts and offences are truly ‘in accordance with law’ awaits any such constitutional challenge. On the basis of the relief claimed in the notice of motion, and in circumstances where the Court is of the view that the ingredients of the offences (and also the torts) of maintenance and champerty have been stated clearly by the Superior Courts of Ireland to prohibit professional third party funding, there are no grounds for entering into an examination of whether the interpretation given to the torts and offences is in accordance with the Constitution.
87. In conclusion, maintenance and champerty continue to be torts and offences in this jurisdiction. From the Irish authorities abovementioned, there is a prohibition on an entity funding litigation in which it has no independent or bona fides interest, for a share of the profits. It is the view of this Court that Harbour III L.P., as a professional third party litigation funder, has no independent interest in this present litigation. Furthermore, it is clear that third party funding arrangements cannot be viewed as being consistent with public policy in this jurisdiction or that modern ideas of propriety in litigation have expanded to such an extent to afford this Court the opportunity to characterise this funding arrangement as acceptable. While the plaintiff has pressed upon this Court that there is a lack of clarity in this regard, that submission is not accepted in view of the consistent line of authorities to the contrary.”
An historical analysis of the role of champerty and maintenance would show how the torts of maintenance and champerty have changed and adapted to reflect the need to protect the integrity and independence of the courts and to prevent trafficking in litigation over the centuries. (See for example, Winfield, The History of Maintenance and Champerty, (1919) 35 L.Q.R. 50.) It is not part of the role of the courts to change and adapt the criminal law so as to ensure that the ingredients of an offence reflect what is necessary to prevent the behaviour that is offensive, in this situation, conduct that interferes with the integrity of the courts and trafficking in litigation. Thus, the question remains as to whether the definitions of these offences found in sources such as Cross and Jones referred to in the judgment of Denham C. J. or in Archbold, referred to above, are sufficiently clear to enable a criminal prosecution to take place for either champerty or maintenance. One can identify certain features which would undoubtedly form part of the constituent elements of an offence, thus, the giving of financial assistance in return for a share of the proceeds of an action would, no doubt, be an ingredient in the criminal offence of champerty. What of the mens rea involved in the offence? What intention would the Director of Public Prosecutions have to prove in order to obtain a conviction?
These are questions for the future. The offences remain on the Statute book despite the fact that they have not been the subject of any prosecution in living memory. Given that the status of the offences of champerty and maintenance has not been challenged on the application before the Court, unless and until the issue of their status is raised and argued in an appropriate case, it would be inappropriate to reach any conclusion on their continued presence in this country as criminal offences.
For the reasons set out in the judgment of Denham C. J., I would dismiss the appeal.
