Litigation Newsletter - April 2017

Contractual Good Faith

The Court of Appeal has overturned a High Court ruling that there was a general principle of good faith in Irish commercial contract law in its ruling in Flynn v Breccia (Unreported, Court of Appeal, 8 March 2017) [2017] IECA 74. Finlay Geoghegan J held that the shareholders' agreement was not the type of contract to which any general duty of good faith applied in accordance with established Irish authority. The judgment noted that Irish contract law does not recognise a general principle of good faith and fair dealing, although there are certain, limited categories of contractual relationships which imply a duty of good faith, such as partnerships and insurance contracts.

Litigation Funding

It is possible that crowdfunding in the above case will become an issue as it may be deemed that this type of litigation is in violation of the rules against maintenance and champerty. The current discourse on litigation funding is live in the pending Supreme Court case of Persona Digital Telephony Ltd v The Minister for Public Enterprise [2016] IESCDET 106. The Supreme Court reserved judgment in the case on 3 April 2017. We await their decision in the wake of the recent decision in SPV Optimal Osus Limited v HSBC Institutional Trust Services (Ireland) Limited & Others (Unreported, Court of Appeal, 2 March 2017) [2017] IECA 56). The Court of Appeal in Osus found that the High Court did not have to find that there was an intention on the part of the assignee to engage in the trading of litigation, whether professional or otherwise. It affirmed the decision of the High Court and it distinguished between the decision in Greenclean Waste Management Ltd v Leahy (No.2) (Unreported, High Court, Hogan J, 5 June 2014) [2014] IEHC 314 and (Unreported, Court of Appeal, 8 May 2015) [2015] IECA 97, stating that in Osus the plaintiff was not supporting the litigant, but purchasing the right to litigate the claim.

Click here for further comment.

Practice Direction - Payment of Costs on Account

HC71 - Payment on account of costs pending taxation

On 28 March 2017 the President of the High Court issued a new practice direction. Due to the long delays in the taxation of costs, the provisions of Order 99, rule 1B (5) have been highlighted by the President. The terms of the direction are as follows:

"I direct that in all cases where there is no dispute as to the liability for the payment of costs and in any other case which a judge thinks appropriate...