Persona must reveal funding deal behind mobile license court action

An unsuccessful bidder for the State’s second mobile phone license must reveal the general terms of an arrangement whereby a British company is funding their action for damages against the State and businessman Denis O’Brien.

Persona Digital Telephony and Sigma Wireless Networks were runners-up in the license competition, which was awarded to Mr O’Brien’s Esat Digifone consortium in 1996.

They are suing the State over claims the process was conducted unfairlyand that Esat allegedly won the competition by bribing the then Minister for Communications, Michael Lowry – which is denied.

A British based “third-party funder”, Harbour Litigation Funding, will get a share of the proceeds if Persona and Sigma are successful and the plaintiffs “quite properly” have asked the High Court to approve of this arrangement in July.

It is the first time that the issue of “third party funding” has come directly before the courts of Ireland, Ms Justice Aileen Donnelly said on Tuesday.

She said the plaintiffs’ application for approval was not a two-way discussion between them and the court and it was necessary for the defendants to see certain parts of the funding agreement for the hearing in July.

“Undoubtedly, this is a unique case,” she said, “for the reasons set out by the Supreme Court” in its decision to allow the action despite objections on the basis of delay and because the case presented a “novel and unusual set of circumstances”.

James A Boyle, a director of Persona and Sigma, claims the plaintiffs have little or no money and “he blames this on the [alleged] wrongdoing of the defendants,” the judgment stated.

He says the plaintiffs do not have the ability to continue the prosecution of the proceedings and that “to date, the continuation of the proceedings has only been possible because of funds provided by the shareholders of the plaintiffs”.

Mr Boyle outlined how a funding agreement was negotiated and entered into in March between the plaintiffs and HF III, a limited partnership incorporated under Cayman Island laws in 2015, which has £230 million sterling available to invest in commercial litigation and arbitration worldwide.

On the evidence before her, Ms Justice Donnelly said the plaintiffs were impecunious and it was only because third party funding had been obtained that they will be in a position to proceed with this “unique action”.

“The plaintiffs are asserting their rights of access to the courts for the purpose of vindicating their rights.”

They “quite properly understood that they had to reveal, at least at a minimum, the existence of the funding agreement, its general terms and the identity of the funder, so that the court may rule on the issues of abuse of process or breach of maintenance or champerty”.

In circumstances where this was an entirely “novel application to these courts, it is appropriate that both the court and other parties to the proceedings should have sight, in general terms at least, of the third party funding agreement”.

The matter was listed for mention on Friday next with the application for approval set down for two days hearing in July.

The case was brought against the Minister for Enterprise and the State. Mr O’Brien secured an order allowing him to be joined in the proceedings last year while Mr Lowry, now an Independent TD, is a third party to the case.

The plaintiffs claim damages for misfeasance in public office, breach of duty, including statutory duty, breach of contract, breach of legitimate expectations, breach of Constitutional rights, breach of rights under EU law and a declaration that the European Communities (Mobiles and Personal Communications) Regulations 1996 contravene EU law.

The claims are denied.