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Consultation on third-party litigation funding published

The Law Reform Commission (the "LRC") has today (Monday, 17 July 2023) published a consultation paper on third-party litigation funding (the "Consultation Paper").  The lengthy Consultation Paper is the result of research and analysis undertaken by the LRC, including consideration of the approaches to funding taken in other jurisdictions, such as New Zealand, England and Wales, and Hong Kong.

The Consultation Paper provides a summary of the current position on third-party funding in Ireland (which is, subject to certain exceptions, currently prohibited) and, in seeking views on the subject, considers various ways in which third-party funding could be legalised and regulated in the State.  The Consultation Paper also addresses the issue of assignment of actions.

The purpose of the Consultation Paper, which is seeking responses by 3 November 2023, is stated by the LRC to be to "inform debate and stimulate discussion, which, it is hoped, will generate responses from all interests and perspectives that will enable the [LRC] to move to a final report setting out its recommendations".  As noted in our recent article here, legislation was enacted earlier this month clarifying that the current restrictions on third-party funding no longer apply to international commercial arbitration, but that further policy change in relation to litigation funding in Ireland is unlikely to happen before the final report of the LRC becomes available.  The publication of the Consultation Paper commences an important part of the process that will lead to the publication of that report.

The discussion in the Consultation Paper includes consideration of third-party funding in the context of the recently enacted Representative Actions for the Protection of the Collective Interests of Consumers Act 2023, which has transposed the EU Representative Actions Directive (the "Directive") into Irish law.  In particular, the Consultation Paper notes that the issue of disclosure in funded disputes will be an important part of the State's ability to comply with the Directive (see in particular Chapter 6 of the Consultation Paper).  Reference to the Directive is also made in Chapter 5 of the Consultation Paper in its discussion of considerations when regulating funding of representative actions.  Further discussion of the impact of the current third-party funding restrictions on the introduction of consumer representative actions in the State can also be found in our previous insights, including here and here

Should you require further information about the issues discussed in this article, please contact Commercial Litigation and Dispute Resolution partners Julie Murphy-O'Connor or Michael Byrne or your usual Matheson contact.