Urgent action needed on access to justice for citizens, says Supreme Court

Access to civil courts, guaranteed by Constitution, threatened by rising litigation costs

The Supreme Court has said legislation needs to be urgently enacted to address mounting difficulties with securing access to justice in the civil courts, particularly in the context of complex commercial litigation.

If a point is reached where it is clear the legislature is making "no real effort" to address the problems, the courts may have to fashion a solution, "undesirable and all as unregulated change might be", the Chief Justice, Mr Justice Frank Clarke, warned.

“There is a problem that requires to be addressed but the best way, by far, of attempting to provide solutions is by means of legislation.”

Unregulated change in relation to third-party funding of cases or the assignments of actions has the potential “to do more harm than good”, he stressed.


Mr Justice William McKechnie said he is increasingly concerned about the difficulties many potential litigants face in attempting to gain access to justice.

The right of access to the courts, a personal right of every citizen guaranteed by the Constitution, “is of little practical value to the majority of litigants if they cannot afford the ever-rising price of litigation.”

“This is a real and pressing issue facing our justice system,” he said.

“The cost of litigation is forever increasing beyond the means or more and more people.”

More than a year after the Supreme Court had drawn attention to the unsatisfactory state of justice on the civil side, the position “remains as dire as it ever was”.

Trading in claims

Both judges made the remarks when agreeing with a substantive judgment, delivered on Tuesday by Mr Justice Donal O’Donnell on behalf of the five-judge court, the focus of which was on litigation trafficking or trading in claims.

Ms Justice Elizabeth Dunne and Ms Justice Mary Finlay Geoghegan also agreed with the Chief Justice's remarks.

In his judgment, Mr Justice O'Donnell ruled that SPV Osus Ltd, a special purpose vehicle which had in 2011 been assigned a cause of action arising from the scandal surrounding US fraudster Bernie Madoff, cannot proceed with its case here because the assignment "very clearly involved trading in claims" and was thus void under Irish law.

Osus had in 2014 initiated proceedings against HSBC Institutional Trust Services (Ireland) Ltd (HITS); HSBC Security Services (Ireland) Ltd (HSSI); Optimal Investment Services SA and Banco Santander SA.

Mr Justice O’Donnell said the case arose after funds of clients of the Santander bank were invested through New York and HITS was appointed as custodian and HSSI as administrator.

Optimal Multi Advisors Ltd, a Bahamas incorporated investment company, had offered clients an opportunity to access investments in funds including the Strategic Series fund.

Optimal Strategic US Equity Ltd was the vehicle used for the Strategic Series of shares and to represent the interest of individual investors.


By late November 2008, almost all its assets, with a net paper value of $2.9 billion and a net equity value off $1.5 billion, were invested in Bernard L Madoff Investments LLC (BLMIS), which had been appointed sub-custodian by HITS.

After BLMIS collapsed due to a “long-running and very large-scale Ponzi fraud”, the assets of Optimal Strategic became whatever value could be extracted from that collapse.

There was a possibility of a substantial recovery of the monies invested through the liquidation of BLMIS, he noted.

A structure was devised to allow Optimal Strategic investors participate in the opportunity presented by possible assignment of claims recognised by the Madoff bankruptcy, and distressed debt investors ultimately held 93 per cent of the shares in SPV Optimal Osus.

A key step in that transaction, and the focus of the Irish case, was the May 2011 assignment by Optimal Strategic to SPV Osus.

For the purpose of this case, it was assumed the assignment extended to all claims the investors might have, and it assigned the entitlement of Optimal Strategic to bring any claim against the defendants.

Mr Justice O'Donnell agreed with the High Court the assignment was void under Irish law because it involved trading in claims.

Mobile phone licence

If it is “offensive to public policy” to permit a person to fund a plaintiff’s litigation in return for some part of the proceedings, as the Supreme Court had found in proceedings concerning the award of the State’s second mobile phone licence, the same public policy must apply where a third party purchases a claim outright, removes the relevant parties from their case, and converts them into a mere witness at best, he said.

Irish law, he ruled, cannot uphold an assignment to a connected party with a view to facilitating third parties obtaining control of, and ultimately benefitting from, the cause of action.

There may be a “significant public interest” in making legal proceedings accessible to litigants of ordinary means insofar as might be possible, whether by reducing the cost of litigation, or providing for some limited and regulated form of third-party funding, he added.

Mary Carolan

Mary Carolan

Mary Carolan is the Legal Affairs Correspondent of the Irish Times