Third party could not pursue claim after purported assignment of bare right to litigate

O'Donnell J (nem diss): Complex commercial issues - funds industry - UCITS funds (Undertakings for Collective Investment in Transferable Securities) - funds operating through Ireland - company representing interests of individual investors - investment in US LLC (Madoff) - collapse of US company - liquidation of company in US - priority of claims - "Allowed Customer Claims" (ACC) - assignment of claims to third party - agreements purporting to assign other rights, actions or claims - commencement of action in Ireland in relation to losses - application by defendants to have proceedings dismissed in limine as contrary to public policy - action dismissed in High Court - decision affirmed in Court of Appeal - leave to appeal to Supreme Court - whether assignment of cause of action would be recognised as valid - whether assignment 'savoured of champerty' - financial support for litigation - s. 28(6) of the Supreme Court of Judicature Act (Ireland) 1877 - assignment of choses in action - whether funders of litigation had a legitimate interest in the litigation - investment in litigation - commoditisation of litigation - consideration of case law in England and Wales - public policy considerations at issue - distinction between maintenance, champerty and the assignment of a bare right to litigate - contours of public policy underpinning the invalidity of an assignment of a right to litigate - whether instant transaction fell outside the public policy exclusion of such actions - whether the assignment was capable of being permissible under the law of New York.

"Assignments of a bare cause of action can therefore be seen as almost the obverse of champerty: whereas in champerty support for litigation is provided in return for payment, in assignment payment is made in return for the action itself. As such, assignment is perhaps if anything more offensive to public policy: in its purest form, an assignment of a bare cause of action involves the outright sale of a cause of action which is then pursued by the assignee (who has no interest or connection to the action other than that created by the assignment itself) to the exclusion of the assignor.
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I consider in any event that the decision of the House of Lords, insomuch that it is different from that of the Court of Appeal, is preferable in a matter of law and logic. It liberalises the law in expanding the circumstances in which an assignment will be permitted, while maintaining a principle that causes of action can be void for considerations of modern public policy. In doing so, it gives, in my view, a clear indicator of the features of an assignment which may make it void and unenforceable. Accordingly, I would not accept the invitation to simply adopt the Court of Appeal judgment in Trendtex in preference to that of the House of Lords. For reasons of comity, policy, and most importantly because I consider that the reasoning is persuasive, I would prefer the analysis of the House of Lords in Trendtex.
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Accordingly, in my view, this case resolves itself into a question of whether the fact that the assignment here purported to permit the claim brought by the plaintiff was part of a larger comprehensive assignment of claims (and, moreover, in a form required by the Trustee in Bankruptcy and approved by the court supervising it) represents a sufficiently genuine commercial interest to permit the assignment to be enforceable in these proceedings.
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[I]f it is offensive to public policy to permit a person to fund a plaintiff’s litigation in return for some part of the proceedings, then the same public policy must apply a fortiori where the third party purchases the claim outright, removes the party from his or her proceedings, and converts them into a mere witness at best .
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Absent some justification, such an assignment offends in at least two ways against important values of the system. First, the litigation loses its character as one brought between parties to vindicate their rights to seek to recover compensation for wrongs done. The original, wronged plaintiff is removed from the proceedings, and their claim converted into a conduit for financial recovery by the assignee. Furthermore, the structure of the transaction envisages (and in most cases will be driven by) the prospect of a profit being made by the assignee, with the assignor recovering less, on this hypothesis, than they are properly entitled to as a matter of justice.
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Commercial considerations can and should have a significant impact on litigation, whether relatively minor claims in the District Court or massive litigation in the High Court. However, the justification for the court and the system of litigation in this and other jurisdictions is not the stimulation of economic activity: rather, it is the administration of justice, however imperfect, inefficient and frustrating that may be on occasions. If so, in my view, the public policy which views with suspicion the acquisition of claims by unconnected third parties and their pursuit in order to recover profits remains valid, as indeed the case law demonstrates."

Clarke CJ (concurring): Problem of access to justice in complex commercial world - burden of complying with disclosure obligations - third party funding.

"However, I remain very concerned that there are cases where persons or entities have suffered from wrongdoing but where those persons or entities are unable effectively to vindicate their rights because of the cost of going to court. That is a problem to which solutions require to be found. It does seem to me that this is an issue to which the legislature should give urgent consideration. But it is not open to the courts to fashion a carefully regulated scheme that balances advantages and risks."

McKechnie J (concurring): [judgment not yet available]