Litigation Funding in Ireland
The rules regarding litigation funding in Ireland are strict because the legal system upholds the historic ‘maintenance’ and ‘champerty’ rules. There are however legal ways to fund the legal disbursements of a case using third party funding and insurance solutions. Understanding the basics of the law in this area will help you decide which route to take.
What is Litigation Funding?
It’s when a third party pays for all, or some, of the plaintiff’s legal fees so they can take their case to court.
A connection to the plaintiff
Under the maintenance rules, a third party can fund legal action when they have a lawful interest or legitimate concern in the case. For example a shareholder, or creditor, of a company can pay for that company to sue another firm for breach of contract. If the legal action is not successful, they will lose the money they have paid or promised to pay.
After the Event Insurance (ATE)
A plaintiff can take out ATE insurance to cover their costs and the costs of the defendant if they lose their case. In reality, this is a safety net rather than a direct funding option.
What about professional Third Party Funders?
In England, commercial firms can pay legal costs in return for an agreed fee, which is paid from the proceeds of the case. In Ireland, the champerty rules ban third parties from earning fees by funding legal costs. Professional funders also fall foul of the maintenance rules because they have no prior connection to the case.
Is the law likely to change?
Many legal experts believe the courts are becoming less rigid in their attitude to litigation funding, the Greenclean Waste Management ruling is one of the reasons why. This is because the case led to the Court of Appeal confirming that ATE insurance is legal, and does not conflict with either maintenance or champerty. There could also be government reform of litigation funding by way of new legislation for the courts to follow.
So, what can Claims Funding do for people who can’t afford legal fees?
Irish citizens are legally entitled to pursue justice through the courts – it’s part of the constitution. Unfortunately, legal action is costly and many people simply do not have the means to pay for it.
Although we cannot cover the cost of lawyers fees, we can provide funding for medical, rehabilitation, personal and living expenses. We can also provide funding for legal disbursements, which involves the likes of court fees, consultancy fees and expert reports. Legal disbursements are treated separately to lawyers fees with claimants either paying for them direct to the experts or expecting their lawyer to pay for same. Claims funding simply cover that cost . For many years the credit unions and banks in Ireland would provide this funding on a loan basis to claimants, therefore this type of funding is perfectly legal.
Claims Funding assesses applications within days and the money is only repaid if the case is won . We do not take a percentage of the claim – we agree fees at a fixed rate. For a free review call our team or complete our online form.