In its recent decision in QPQ Limited v Schute [2026] IEHC 463, the High Court confirmed that it has an inherent jurisdiction to order the disclosure of litigation funding arrangements where there is a credible basis for believing the proceedings may be supported by unlawful third-party funding. This was held to come within its inherent jurisdiction to make any order designed to protect the courts from abuse and to ensure that the administration of justice operates in an efficient and effective manner.
The court said funding for litigation from a party who already has an interest in the litigation (ie a shareholder or creditor of the plaintiff) would not require a disclosure order. However, the court considered the corollary of this principle is that, if the funding does not come from a shareholder or other party with a legitimate interest in the litigation, then getting precise details of the identity of the funder and the terms of that funding is a necessary or proportionate step to allow a defendant to understand his or her true adversary.
Parties should carefully consider their funding arrangements to ensure compliance with Irish law and must be ready to explain those funding arrangements if ordered to do so by the court.
The rules against champerty and maintenance
Irish law prohibits both maintenance and champerty, which are both torts and crimes under Irish law. Maintenance arises where a person with no legitimate interest in a dispute funds litigation. Champerty is a form of maintenance where a party funds litigation in return for a share of the proceeds. Funding by shareholders or creditors will generally not be considered champerty or maintenance because they are deemed to have a legitimate interest in the proceedings.
Background to QPQ v Schute
The main proceedings were brought by QPQ Limited (“QPQ”), a fintech and blockchain company based in Dublin, against minority shareholder Geert Schute. QPQ claimed that Mr Schute breached a shareholders agreement by copying its blockchain technology, using it to develop a rival product and causing several QPQ employees to leave the company.
Mr Schute brought an application seeking disclosure by QPQ of its litigation funding arrangements.
It was agreed between the parties that QPQ could not afford the cost of bringing proceedings. QPQ claimed that its only source of funding for the proceedings was its parent company, QPQ AG, a Swiss entity (which would not contravene the rules on champerty and maintenance). Mr Schute, however, claimed that other sources of funding via third parties had been funnelled through the parent company.
Mr Schute relied in his application on a number documents received from QPQ on discovery, including an email from a director of QPQ to Mr Paul Thompson (who was not a director of QPQ at the time) stating that 50 per cent of the damages from the litigation would be shared with those that ‘fund the litigation’. Further evidence was provided of WhatsApp messages between a former director and a current director stating that a third party “has funded a bit and he has people lined up to provide more funding…”.
What were the key issues determined by the court?
Two key issues were determined by the court in the context of third-party funding:
1. Does the High Court have jurisdiction to order disclosure of litigation funding arrangements?
The court found that it has an inherent jurisdiction to order disclosure of funding arrangements for Irish litigation based on the Supreme Court decision in Kirwan v Connors [2025] IESC 21 (which refined the test for strike out for delay, as discussed in our previous insight here, and also established that the court has an inherent jurisdiction to make any order designed to protect the courts from abuse and to ensure that the administration of justice operates in an efficient and effective manner).
The court found that the funding of litigation by parties with no legitimate interest in the proceedings is a criminal offence, and constitutes an abuse of process. As such, the court must have the power to compel disclosure of alleged unlawful funding as part of its inherent jurisdiction to protect the administration of justice from abuse of process and to protect the efficiency and effectiveness of the courts.
2. Was there sufficient evidence to justify the making of the order?
QPQ argued that its funding for the Irish litigation was solely from its parent company, with a director providing undertakings and sworn testimony to that effect. It relied on the case of Thema International Fund plc v HSBC Institutional Trust Services (Ireland) Ltd [2011] IEHC 357 in which the High Court confirmed litigation funding by a shareholder with a genuine commercial interest in the outcome of the proceedings does not amount to unlawful maintenance or champerty.
The defendant, however, argued that there was sufficient evidence to suggest that funding had come from a third party without a sufficient interest, relying on certain internal emails and WhatsApp messages that had come to light in discovery, suggesting that the parent company was receiving funding from unrelated third parties.
These messages were considered sufficient for the court to distinguish the facts in this case from Thema. The court noted that this type of “casual messaging” is often the most valuable in clarifying parties’ true positions. Because casual messaging is unguarded and such communication is not passed through the filter of legal advice, it can amount to a more candid indication of the parties’ actual intentions or understanding.
Key takeaways following QPQ v Schute
Interestingly, Mr Justice Twomey commented that “there would not seem to be a pressing need for the removal of the current prohibition on third-party funding of litigation in Ireland”.
This follows comments from the Minister for Justice that he is very hesitant about introducing third-party litigation funding, warning it risks commodifying justice and enriching lawyers rather than benefitting plaintiffs. While expressing deep caution, the Minister has indicated he is waiting for the final report and recommendations from the Law Reform Commission before making a definitive policy decision on the issue.
The Irish Law Reform Commission report on third-party litigation funding is expected to be published in 2026.
For now, parties to proceedings in Ireland should continue to ensure that any litigation funding is compliant with the Irish laws relating to maintenance and champerty. International claimants who may be unfamiliar with these laws should carefully assess their compliance with Irish law.
If you would like to discuss any of the matters addressed above, please contact Disputes and Investigations partners Julie Murphy-O’Connor, April McClements, Karen Reynolds, Michael Byrne, or your usual Matheson contact.
With thanks to Niall McCarthy for his assistance with this article.
