Chief Justice urges consideration of litigation funding reform


The Chief Justice has identified third-party litigation funding reform, which is currently largely prohibited, as a possible means by which access to justice can be improved.

Third party funding generally involves the provision of private financial support to a claimant to enable them to afford to conduct a case, but this practice is permitted in only a few cases in Ireland.

Justice Donal O’Donnell said deliberations on reforming and regulating third-party funding models are one of several areas where efforts could be made to improve access to justice.

He said it must be recognized that providing courtrooms and judges is not enough when “ordinary citizens or even significant corporations” face many obstacles that limit their ability to bring disputes to court and seek a quick and fair resolution reach.

Mr Justice O’Donnell was speaking at the Ballymun Community Law Center where he presented a report on a conference held last year by the Chief Justice’s Working Group on Access to Justice.

“I think it’s now better understood that advances in this area will require careful work by those trying to simplify court procedures, by voluntary groups offering advice and support, by private doctors providing services sometimes for free, and maybe of reflections on reforming and regulating third-party financing models for private litigation,” he said.

Third-party funding is subject to the provisions of maintenance and confidentiality. Child support is litigation funding in which the funder has no interest, while Champerty is litigation funding for a share of the proceeds.

Although such rules have been abolished in most other common law jurisdictions, both remain criminal offenses in Ireland. This means that professional litigation funding “for profit” is unlawful.

Currently, the only types of third-party funding allowed are where the funder has a legitimate interest in the process, e.g. B. is a shareholder of an involved company, or an insurer that provides coverage to the plaintiffs to protect them if their legal proceedings are unsuccessful.

In 2020, a civil rights review group led by former President of the High Court Peter Kelly said third-party funding could facilitate access to justice for low-resource applicants who, without a comprehensive civil legal aid system, might not be able to to proceed otherwise is a right.

It also saw merit in providing third-party funding to liquidators, receivers and trustees for the administration of insurers and receivers to fund proceedings aimed at funding the pool of assets available to creditors.

However, it also expressed concern about the potential to incentivize bad debts and did not recommend recommending its wider use pending the outcome of a review by the Law Reform Commission.

The affordability of litigation in Ireland has long been recognized as a major barrier to access to justice.

The Chief Justice’s predecessor, Justice Frank Clarke, identified a “poverty trap” where some people who cannot reasonably be expected to fund litigation earn too much to qualify for legal aid.

Presenting the report, Judge O’Donnell said the working group would focus this year on the legal aid system.

The move is likely to put further pressure on the Justice Department to agree to expanding the civil legal aid system, which critics say is too narrow and difficult to qualify under current means-testing criteria.

The report outlined research by Professor Trevor Farrow of Toronto’s Osgoode Hall Law School, who found that the benefits of investing in the judiciary far outweigh the costs.

He suggested the benefits include more efficient courts, lower unemployment, lower eviction rates, less homelessness, and lower government spending on welfare and health care. Chief Justice urges consideration of litigation funding reform

Fry Electronics Team

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