Is the door now closed to professional third party litigation funding in Ireland?

29-04-2016

Author: Colin Monaghan, Elizabeth Upton and Florence Loric



Although the law on litigation funding in Ireland has evolved over recent years, a decision of the Irish High Court of 20 April 2016 has affirmed that professional third party litigation funding remains prohibited for now.

Litigation Funding

Litigation funding is where a third party provides financing to allow legal proceedings to progress. There are different forms of funding. Some are allowed in Ireland and others are not. Much depends on the funding arrangement and the relationship between the parties. Litigation funding in Ireland is subject to the rules on maintenance and champerty. Maintenance is the funding of litigation by someone with no legitimate interest in the litigation. Champerty is the funding of litigation in return for a share in the proceeds of the litigation. Since the 1600s, maintenance and champerty have been criminal offences and torts (civil wrongs) in Ireland. The rationale for the prohibition on maintenance and champerty is to uphold the integrity of the litigation system, to prevent trafficking in litigation for profit, and to prevent people with an improper motive influencing litigation. Unlike in some other common law jurisdictions, there has been no legislative change in this area in Ireland and the torts of maintenance and champerty remain part of Irish law.

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