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Polish judgment can be enforced in Ireland

Lawyers at McCann FitzGerald and Matheson have highlighted a recent Supreme Court decision as being of considerable interest to those interested in the development of Irish law on litigation funding. 

The Supreme Court restored a High Court decision that allowed a group of investors to enforce a judgment of a Polish court against Michael Scully. 

Scully had secured the backing of the investors to buy land and build a shopping centre in Poland. 

The venture was ultimately unsuccessful and the investors, having lost their money, set up an Irish company called Coucal Ltd and assigned to it the right to sue Scully in the Polish courts. 

Court of Appeal ruling 

Lawyers at Matheson note that, as a matter of Irish law, such an assignment of a bare cause of action has been regarded as ‘savouring of champerty’ and contrary to Irish public policy. 

Scully had sought to prevent enforcement of the Polish judgment in Ireland, arguing that it was “manifestly contrary to public policy”, a recognised basis for refusing recognition of a judgment in another EU state under article 45(1)(a) of the Brussels Recast Regulation. 

Although the High Court initially refused his application, the Court of Appeal reversed that decision, concluding that because an assignment of a bare cause of action was impermissible and in contravention of Irish public policy, this rendered the judgment unenforceable. 

‘Clear difference’ 

Lawyers at McCann FitzGerald note that the Supreme Court disagreed with the reasoning adopted by the Court of Appeal. 

Chief Justice Donal O’Donnell held that that there was a clear difference between an Irish court being asked to enforce an assignment of rights and being asked to enforce a judgment obtained in another country on foot of such an assignment. 

Given the high hurdle for the public-policy exception as outlined in article 45, requiring “something offensive to basic, fundamental, and essential provisions of the legal order”, the chief justice concluded that standard was not reached in this case. 

Lawyers at Matheson point to a second judgment from Mr Justice Hogan, who said that the Brussels Recast prevented an Irish court from looking behind the Polish judgment or questioning its merits. 

Third-party litigation 

Matheson says that the Supreme Court’s judgment reaffirms that recognition of EU judgments will be refused on public-policy grounds in only the most exceptional circumstances. 

“The ruling in Scully v Coucal will be of particular interest to third-party litigation funders, insofar as it suggests a third-party-funded case, that results in a judgment in an EU member state where third-party litigation funding is lawful, would not be rendered unenforceable in Ireland on public-policy grounds based merely on differences in procedural law,” the firm’s lawyers add. 

McCann FitzGerald says that the judgment will provide some comfort to litigants in countries outside Ireland who have obtained judgment on foot of an agreement involving an assignment of rights that their judgment will not necessarily be blocked from enforcement by the continued presence of prohibitions on maintenance and champerty. 

The Law Reform Commission is currently examining the issue of third-party litigation funding in Ireland.