Irish Courts Reaffirm Strict Ban on Third-Party Litigation Funding

The ancient legal doctrines of maintenance and champerty continue to cast a long shadow over the modern Irish legal landscape, firmly precluding the general funding of litigation by third parties. While neighbouring jurisdictions such as the United Kingdom and the United States have increasingly embraced third-party litigation funding as a pragmatic tool to enhance access to justice, the Irish courts have consistently reaffirmed a strict prohibition. Maintenance involves the funding of litigation by a party with no legitimate independent interest in the dispute, while champerty takes this a step further by involving an agreement to take a share of the eventual proceeds. For decades, these rules have been justified on the grounds that they protect the integrity of the Court Service and prevent the commodification of justice. However, modern commercial realities and the rising costs of taking a case to court have brought these historical doctrines back into the intense glare of the legal spotlight.

The intersection between traditional prohibitions and modern funding mechanisms was recently scrutinised by the High Court in the case of Campbell v O'Doherty [2025] IEHC 223, which examined the increasingly common phenomenon of crowdfunding to support legal actions. Following closely on the heels of that examination, the Irish courts have delivered two further landmark judgments that provide essential clarity for practitioners and litigants alike. The Supreme Court in Howley v McClean; Howley v Howard [2026] IESC 34 addressed the legality of traditional "no foal, no fee" arrangements and the application of conditional uplift fees in specific contexts. Concurrently, the High Court in QPQ Limited v Schute [2026] IEHC 463 tackled the thorny issue of when a party might be compelled to reveal the intricate details of its litigation funding arrangements. Together, these rulings offer a comprehensive overview of where the boundaries of lawful litigation funding currently lie in the Republic of Ireland.

Constitutional Rights and Access to Justice

In delivering the Supreme Court’s judgment in Howley, Mr Justice Gerard Hogan placed significant emphasis on the delicate balance between preventing champerty and upholding fundamental constitutional principles. He noted that when applying the law relating to maintenance and champerty, the courts must carefully consider the constitutional right of access to the courts, a cornerstone of Irish democratic society. Hogan J eloquently stressed that a practice which has become deeply embedded in the administration of justice, and which actively operates to facilitate such access, should not be declared unlawful save on the most compelling of grounds. This perspective is particularly resonant in the context of ordinary citizens seeking redress through institutions like the Injuries Resolution Board or the Workplace Relations Commission, where the prospect of subsequent, costly court proceedings can be a significant deterrent. Without pragmatic fee structures, the constitutional guarantee of access to justice would risk becoming a hollow promise for those without substantial independent means.

The Supreme Court took the opportunity to firmly copper-fasten the legality of "no foal, no fee" arrangements, which have long been a vital mechanism for facilitating litigation in this jurisdiction. Citing established authorities such as McHugh v Keane from 1994 and Synott v Adekoya from 2010, the court confirmed that these agreements do not offend the rules against maintenance and champerty. In a "no foal, no fee" scenario, the legal representative agrees that their professional fee will only become payable if the client successfully recovers damages or a settlement. This model is ubiquitous in Irish personal injury litigation and medical negligence claims, serving as a crucial bridge for plaintiffs who could not otherwise afford to initiate proceedings. By validating this established practice at the highest judicial level, the Supreme Court has provided immense reassurance to both the legal profession and prospective claimants navigating the complexities of the Irish justice system.

Statutory Exceptions and Conditional Uplifts

The factual matrix of the Howley case provided a fascinating context for exploring statutory exceptions to the general ban on champerty, specifically concerning a tax debt recovery action initiated by the Revenue Commissioners. The fee agreement structured between the Revenue Commissioners and their designated panel of solicitors included a conditional uplift based on the precise amount of capital actually recovered from the taxpayer. Furthermore, it incorporated a "no foal, no fee" element, meaning the remuneration payable to the law firms was entirely contingent on the successful extraction of the owed sums. Historically, an arrangement that tied a solicitor’s compensation directly to a percentage or uplift of the recovered amount would have unequivocally offended the strict common law rules against champerty. However, the Supreme Court was required to interpret these historical rules through the modern lens of recent legislative reforms enacted by the Oireachtas.

The court ultimately held that, pursuant to section 149(1)(a) of the Legal Services Regulation Act 2015, such conditional uplift fee arrangements are entirely lawful within this specific context and do not fall foul of the champerty prohibitions. The judgment candidly acknowledged that while this type of financial arrangement would have been struck down in the past, the common law rule has been explicitly supplanted by the statutory exceptions provided for in the 2015 Act. Crucially, the Supreme Court clarified that this exception applies specifically so far as debt collection cases of this nature are concerned, rather than creating a blanket authorisation for conditional uplifts across all forms of litigation. This nuanced interpretation highlights the legislature's intention to facilitate efficient state debt recovery while maintaining the broader protective shield against the commercialisation of general civil litigation.

The Formidable Defence of Champerty

Beyond clarifying the legality of specific fee structures, the Supreme Court in Howley also addressed the procedural consequences for a plaintiff found to be relying on an unlawful champertous arrangement. The court confirmed that the essential, overriding purpose of the doctrines of maintenance and champerty is to fiercely maintain the integrity of the administration of justice. Consequently, the remedies available to a litigant who finds themselves facing a claim backed by an illicit funding arrangement are not merely limited to initiating a separate, subsequent action in tort for damages. Instead, the existence of a champertous agreement can act as an absolute and full defence to the substantive claim being brought against them. The Supreme Court reasoned that obliging defendants to engage with and defend proceedings that are fundamentally tainted by champerty would effectively undermine the very rules designed to protect them.

Court Jurisdiction and Mandatory Disclosure

The practical enforcement of these rules was further illuminated by the High Court’s decision in QPQ Limited v Schute, which examined the circumstances under which a litigant might be forced to lay their financial cards on the table. In this case, the application for the disclosure of funding arrangements was brought by the defendant following the discovery of revealing WhatsApp messages exchanged by the plaintiff. The defendant compellingly argued that these digital communications clearly demonstrated that an undisclosed third party had already provided financial backing for the litigation, with suggestions that additional funding might become available as the case progressed. The High Court was tasked with determining whether it had the authority to compel the plaintiff to reveal the precise nature and source of this external financial support. Relying on recent Supreme Court jurisprudence, the presiding judge took a robust approach to the court's supervisory role over litigation conducted within its jurisdiction.

Citing the precedent established in Kirwan v Connors [2025] IESC 21, the High Court confirmed that it enjoys a broad and inherent jurisdiction to make any order designed to ensure that the administration of justice operates both efficiently and effectively. The court determined that this inherent jurisdiction undoubtedly encompasses the power to make a mandatory disclosure order regarding funding, irrespective of exactly how the existence of the suspicious arrangement first came to the court's attention. Dismissing arguments that the disclosure order should be refused due to alleged delays or a prior failure to seek security for costs, the judge ordered the plaintiff to fully disclose the source and intricate details of its funding to both the defendant and the court. This decisive ruling serves as a stark warning that secretive third-party funding arrangements will not be shielded from judicial scrutiny once a credible evidential basis for their existence is established.

Ultimately, these recent decisions represent a significant refinement of the rules governing litigation funding, precisely tailoring their operation to the realities of modern legal practice in Ireland. The Supreme Court’s ruling in Howley has provided indispensable clarity on the lawfulness of essential solicitor fee arrangements, ensuring that access to justice is preserved for those relying on traditional contingent models. Simultaneously, the High Court in QPQ has demonstrated that the judiciary will not hesitate to pierce the veil of litigation funding where there is a legitimate suspicion of unlawful third-party interference. However, while these judgments offer valuable guidance on the margins, they do not represent a fundamental departure from the long-established Irish position. Commercial third-party litigation funding remains generally prohibited across the Republic, preserved only in limited, statutorily recognised circumstances, ensuring that the Irish courts remain a forum for resolving genuine disputes rather than a marketplace for speculative investment.