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31 January 2017
The introduction of the Court of Appeal in 2015 removed the former entitlement of most litigants to bring a direct appeal to the Supreme Court from the High Court. The Court of Appeal is now the first appellate court. In exceptional circumstances the Supreme Court may permit a party to bypass the Court of Appeal and appeal directly to the Supreme Court, known as a 'leapfrog appeal'.
In Persona Digital Telephony Limited v The Minister for Public Enterprise Ireland, the High Court upheld a centuries-old prohibition on litigation funding by a third party in return for a share of the proceeds with the party that has a genuine interest in the case. The Supreme Court accepted a leapfrog appeal to determine the issue of:
"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."
Persona related to Ireland's award of the second mobile telephone licence in 1995. The two plaintiffs, Persona Digital Telephony and Sigma Wireless Networks Limited, were part of a consortium of bidders that came second in the competition to be awarded the licence. Esat Digifone was awarded the licence. Persona and Sigma started High Court proceedings against the minister in 2001 seeking damages for, among other things, the minister's unlawful interference in competition.
In 2015 Persona and Sigma entered into an agreement with a professional litigation funder, Harbour III Limited Partnership, to fund the continued running of their case. The precise details of that agreement have not been made public.
Longstanding rules prohibit certain third-party funding of litigation. In a number of recent judgments the High Court has held that those prohibitions still exist in Irish law. Persona and Sigma sought a High Court declaration that their arrangement with Harbour did not contravene the rules against third-party funding. The High Court once again upheld the prohibition of litigation funding by a third party. The court held that a funding agreement of this type was captured by the prohibition.
Persona and Sigma sought leave for a leapfrog appeal of the High Court's decision to the Supreme Court. As a matter of significant general public importance, Persona's and Sigma's arguments included the question of whether a litigant is entitled to access third-party funding in order to facilitate access to the courts. The question of how the rules against third-party funding agreements are to be applied has wider significance.
The appeal raised the question of the constitutional rights of access to justice and freedom of contract.
The Supreme Court noted that to grant leave for a leapfrog appeal it had to be satisfied that the issues raised by an appellant involved a matter of public importance or that, in the interest of justice, it was necessary for an appeal to the Supreme Court and that there were exceptional circumstances to warrant a leapfrog appeal.
The Supreme Court determined that when balanced against the need for efficient use of court resources, constitutional principles of access to the courts and justice, as well as the likelihood that any Court of Appeal decision would be appealed to the Supreme Court (thus involving repetition of the same arguments), did in fact meet the 'exceptional circumstances' requirement to justify a leapfrog appeal.
The Supreme Court accordingly gave leave to Persona and Sigma to make a leapfrog appeal to determine:
"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."
Third-party funding has become increasingly relevant in litigation globally. The question to be answered by the Supreme Court in this leapfrog appeal is somewhat narrow, but it is hoped that the judgment will consider the rules regarding third-party funding more broadly. This outcome would be welcomed by litigants, professional litigation funders and legal practitioners.
For further information on this topic please contact Nicola Dunleavy at Matheson by telephone (+353 1 232 2000) or email (firstname.lastname@example.org). The Matheson website can be accessed at www.matheson.com.
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