Sunday 22 October 2017

Supreme Court reserves judgment on bid to overturn ban on €10m fund to fight O'Brien case

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Aodhan O'Faolain

A five-judge Supreme Court has reserved judgment on an appeal against a decision preventing an English company funding a legal action over the 1996 award of the State’s second mobile phone licence to Esat Digifone, a company of businessman Denis O’Brien.

Persona Digital Telephony says, if the High Court decision stands, it will have to drop its case against the State, Mr O'Brien and former Government minister Michael Lowry because it does not have the estimated €10m necessary to continue it.

It argues its case is of significant public importance, should be let proceed in the interests of justice and public policy and the type of third party funding involved is not contrary to pubic policy.

Persona and Sigma Wireless Networks Ltd, members of a consortium that was among the failed bidders for the licence, have appealed the High Court's April 2016 decision the intended funding arrangement with Harbour III Limited Partnership is impermissible because of the law here on maintenance and champerty.

Non-party funding of litigation here is permitted only where it does not breach either of these prohibitions.

Maintenance involves improper interference in civil proceedings often by way of provision of financial assistance. Champerty is a form of maintenance where financial support is provided by a party with no connection to the dispute in exchange for a share in the spoils of any proceeds from the litigation or some other profit.

Persona argues its arrangement with Harbour does not contravene the rules on maintenance and champerty. Should its case be successful, it is understood the funder will get some 40 per cent of any proceeds or damages.

In April 2016, the High Court found maintenance and champerty continue to be torts and offences here and there is a prohibition on a body funding, in exchange or a share of any profits,  litigation in which it has no independent or bona fide interest.

Ms Justice Aileen Donnelly held Harbour had no independent interest in this litigation and also held third party funding arrangements cannot be regarded as consistent with public policy here.

The Supreme Court previously determined Persona/Sigma could bring a "leapfrog" appeal directly to that court because the case raised a legal issue of general public importance concerning application of the doctrines of maintenance and champerty which may involve issues of access to justice and the courts.

It agreed to consider 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.

On Tuesday, Paul O'Higgins SC, with Jim O'Callaghan SC, for Mr O'Brien, and Niall Buckley SC, for Mr Lowry, all agreed with the State's arguments that Irish law prohibits the type of funding arrangement involved here and submitted the High Court decision should be upheld. 

At the conclusion of the two day appeal, the Chief Justice, Ms Justice Susan Denham, said the court was reserving judgment.

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