Northern Ireland
The Northern Ireland litigation landscape is marked by several key trends. A significant rise in insolvency, fraud, and enforcement cases is anticipated, likely influenced by the economic aftermath of the pandemic and persistent financial pressures. Telecoms litigation is also a growing area. Additionally, there is an ever-increasing usage of alternative dispute resolution methods.
1. Is third party funding permissible for disputes?
The position on whether third party funding is permissible in Northern Ireland remains some-what unclear. The 2017 Review Group’s Report on Civil Justice (in Northern Ireland) in 2017 indicated in footnote 26 on page 79 of that report that following the “abolition of champerty under the Criminal Justice (Miscellaneous Provisions) Act (Northern Ireland) 1968…there appears to be no apparent restriction on third-party funding in Northern Ireland, in line with the position in England and Wales”.
A recent judgment of the Bankruptcy and Companies Master in Northern Ireland, Master Kelly, has cast recent doubt of the legality and validity of third party litigation funding. A direct quotation from that judgment, which at the time of writing is under appeal, is as follows:
“Nor did [the Trustee] inform them that litigation funding is untested and arguably contrary to public policy here” [emphasis added].
There is therefore serious doubt over the validity of third party funding in civil litigation in Northern Ireland.
2. Are lawyers able to work on a contingent basis in the jurisdiction and are there any restrictions?
Neither Conditional Fee Agreements (“CFA”) nor Damages Based Agreements, are legal for use in Northern Ireland.
Some firms operate ‘informal CFA’ arrangements with clients, particularly in the field of personal injury litigation, but again the validity of these arrangements is questionable.
3. Can the court or tribunal order one party to pay the other’s legal costs?
Yes, in Northern Ireland, the court or tribunal can order one party to pay the other’s legal costs.
In the County Court, these costs are subject to a fixed scale; they are therefore known as ‘scale costs’.
In the High Court, costs are at the court’s discretion. There are scales that are used to help guide the quantum of these costs, but they are not of the same fixed nature as County Court scale fees. Whilst in the High Court the unsuccessful party generally pays the successful party’s costs, the court will take into account factors such as conduct and degree of success.
At present in Northern Ireland, it is not the norm that costs of interim applications are paid within a short period of time after that application has concluded; generally costs fall to be dealt with at the conclusion of a case.
If there is an award of costs in favour of a party, or indeed as part of a settlement, one party agrees to pay the costs of the other, often these costs will expressed to be “to be taxed if not agreed.” Taxation of costs is a detailed, separate process which involves a hearing process before the Taxing Master at the High Court in Belfast.
4. Is insurance available to protect against adverse outcomes for funded litigation?
Yes, insurance is available in Northern Ireland to protect against an adverse outcome and in particular, meeting the costs of the successful counter-party. After-the-event insurance (“ATE”) in respect of liability for legal fees is however encountered relatively infrequently in Northern Ireland. This may be because the premiums payable are not recoverable from the losing side, and can often be relatively large.
Contact
Emily Paisley Senior Associate
© Eversheds Sutherland. All rights reserved. Eversheds Sutherland is a global provider of legal and other services operating through various separate and distinct legal entities. Eversheds Sutherland is the name and brand under which the members of Eversheds Sutherland Limited (Eversheds Sutherland (International) LLP and Eversheds Sutherland (US) LLP) and their respective controlled, managed and affiliated firms and the members of Eversheds Sutherland (Europe) Limited (each an "Eversheds Sutherland Entity" and together the "Eversheds Sutherland Entities") provide legal or other services to clients around the world. Eversheds Sutherland Entities are constituted and regulated in accordance with relevant local regulatory and legal requirements and operate in accordance with their locally registered names. The use of the name Eversheds Sutherland, is for description purposes only and does not imply that the Eversheds Sutherland Entities are in a partnership or are part of a global LLP. The responsibility for the provision of services to the client is defined in the terms of engagement between the instructed firm and the client.
Share this page