Friday 2 December 2016

Court rules UK firm can't fund O'Brien legal action

Eoin Reynolds

Published 21/04/2016 | 02:30

Denis O’Brien. Photo: Mark Condren
Denis O’Brien. Photo: Mark Condren

A high court judge has refused to allow an English company to fund a legal action against the State, businessman Denis O'Brien and former minister Michael Lowry.

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The decision, based on a law that dates back to 1634, means that the case will not go ahead, as the plaintiff does not have enough money to pay the legal fees.

Ms Justice Aileen Donnelly said yesterday third-party funding in such cases is illegal under Irish law. The plaintiff, James Boyle of Persona Digital Telephony, said he does not have the €10m needed, and will therefore have to drop the case.

Mr Boyle had sought to take a case after his company lost out on a mobile phone licence that was issued to Denis O'Brien's Esat Digifone consortium in 1996. He claimed that Esat won the competition by bribing the then Communications Minister Michael Lowry - which is denied.

While third-party funding of legal cases is common in Britain, it is banned in Ireland under the ancient law of 'champerty'. It states that no third party should be allowed to fund a legal case in the hope that they will take a share of any financial award.

The law is believed to date back to Roman times and became part of Irish law during British rule when the Maintenance and Embracery Act was passed in 1634. This case was the first time that a direct challenge has been made to the law in an Irish court.

In her judgment, Judge Donnelly said she had considered arguments made by Persona's legal team that the constitutional right to access to the courts should supersede an ancient law that had been abandoned in Britain and elsewhere.

She said she accepted an affidavit filed by Mr Boyle in which he said he is "nowhere near the estimated €10m required to finance the proposed litigation".

She said Mr Boyle had confirmed that if the funding arrangement is not approved, he will have no other means of prosecuting the case.

She added that Persona's legal team had said their claim is "of great public importance" and that if she allowed the funding arrangement she would ensure "the constitutional guarantee of access to justice".

But citing numerous judgments by Irish courts upholding the law of champerty, she said third-party funding arrangements, "cannot be viewed as being consistent with public policy in this jurisdiction".

She also pointed out that Persona had not challenged the constitutionality of the law.

Irish Independent

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