The Court of Appeal has confirmed the position in Ireland in its recent decision in SPV Optimal Osus Limited v HSBC Institutional Trust Services (Ireland) Limited & Ors. This decision stemmed from the considerable amount of litigation arising from the Bernie Madoff scandal and concerned the assignment of funds. In the High Court, Justice Costello reviewed both the Irish and English authorities in considering whether the assignment here was void for being champertous and contrary to public policy and outlined the Irish position in 14 principles. She held that the assignment in this case was void because it amounted to the assignment of a bare cause of action and constituted trafficking in litigation. This decision was appealed.
The Court of Appeal found that the High Court did not have to find that there was an intention on the part of the assignee to engage in the trading of litigation, whether professional or otherwise. The Court of Appeal affirmed the decision of Justice Costello in the High Court and in doing so drew a distinction between the decision in Greenclean Waste Management Ltd v Leahy (No.2), where there was a "legitimate commercial purpose" behind the insurer's involvement in the claim, and the case in hand, where the plaintiff had purchased the right to litigate the claim.
Similar issues were before the Supreme Court this week as it heard the case of Persona Digital Telephony Limited & Anor v Minister for Public Enterprise & Ors. It is understood that the Supreme Court reserved its judgment in this case at the close of submissions by the parties on 4 April 2017. It is anticipated that this decision will provide clarity on the position of litigation funding in Ireland given the changes that have occurred in this area of the law over the last number of years in England, where a more permissive regime is in place. We will provide an update on the position after the Supreme Court decision is published.
The Court of Appeal judgment in SPV Optimal Osus Limited v HSBC Institutional Trust Services (Ireland) Limited & Ors  IECA 56 can be accessed here.