1. Introduction
Howley v McClean; Howley v. Howard (Approved) [2026] IESC 34 is a Supreme Court of Ireland decision (Hogan J.)
addressing a challenge to the legality of common solicitor remuneration models in the context of tax debt recovery.
The plaintiff/respondent was the Collector-General (acting through a panel of nominated solicitors under a “Revenue” contract).
The defendants/appellants were two defaulting taxpayers.
The taxpayers argued that elements of the Collector-General’s contract with the nominated solicitors were
champertous (and thus void/unenforceable), namely:
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a success-dependent percentage element linked to sums recovered (a “conditional uplift”);
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a “no foal, no fee” style structure in which higher remuneration depended on recovery of costs from the taxpayer
(principally via clause 5.2, as originally drafted).
The Supreme Court treated the central question as whether these arrangements were champertous or otherwise unlawful,
and—crucially—also addressed whether champerty can operate as a defence to otherwise maintainable proceedings.
3. Analysis
3.1 The Contractual Mechanisms in Issue (Clauses 5.2 and 5.3)
The Court analysed the “Revenue” contract structure:
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Clause 5.3 provided staged fixed fees plus a percentage commission tied to amounts collected (the “conditional uplift”).
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Clause 5.2 contemplated taxation and invoicing mechanics and, in substance, a higher remuneration outcome contingent on
successful recovery of costs from the taxpayer; if unrecovered, remuneration was limited to clause 5.3 payments (clause 5.2(vi)–(vii)).
3.2 Precedents Cited (and How They Were Used)
(a) Champerty, percentage fees, and statutory modification
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Re A Solicitor [1912] 1 KB 302: cited to show that percentage-of-recovery remuneration was historically treated as champertous,
described as “campi partitio” (division of the spoils). The Court treated this as the common law baseline.
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Wallersteiner v. Moir (No. 2) [1975] QB 373: used to illustrate the classic English articulation that
commission proportionate to sums recovered and payable only on success was regarded as champerty.
The Supreme Court accepted it as reflective of English common law thinking, but not determinative of modern Irish law—especially given
Irish statutory intervention for debt claims.
Against this baseline, the Court placed decisive weight on legislative change:
s. 149(1)(a) of the Legal Services Regulation Act 2015 (replicating the earlier effect of s. 68 of the Solicitors (Amendment) Act 1994)
creates an exception for “a matter seeking only to recover a debt or liquidated demand”.
The proceedings were exactly that (tax debts final and conclusive under s. 949(3) of the Taxes Consolidation Act 1997).
The Court also rejected a narrow construction that would disallow “mixed” fee arrangements (fixed fees plus percentage commission),
reasoning that the Oireachtas’s policy choice would be undermined by such a restriction.
(b) “No foal, no fee” legality: pre-1922 common law vs later English case-law
A central move in the judgment is historical-constitutional: identifying what the common law position was in 1922, what was carried forward,
and whether later English developments should be treated as defining Irish law.
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Jennings v. Johnson (1872-1873) LR 8 CP 425: interpreted s. 11 of the Attorneys’ and Solicitors’ Act 1870 so that
“a promise not to charge anything for costs is not champerty”. This authority underpinned the proposition that the 1870 Act did not render
“no foal, no fee” unlawful.
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Re A Solicitor [1956] 1 QB 155: noted for its observation that Jennings was decided close in time to the 1870 Act’s enactment,
supporting its interpretive authority.
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Ladd v. London Road Car Co. (1900) 110 LT Jo. 80 and Rich v. Cook (1900) 110 LT Jo. 94: cited as policy-leaning
support for speculative litigation funding by lawyers where justice would otherwise be inaccessible.
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Clare v. Joseph [1907] 2 KB 369: relied upon to show that fee arrangements involving reduced remuneration could be lawful if fair
and within court control of solicitor-client dealings.
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Pittman v. Prudential Deposit Bank Ltd. (1896) 13 TLR 110: acknowledged as a stricter view, but treated as not displacing the
“clear balance of authority” favouring permissibility pre-1922.
The Court then contrasted post-1922 English developments:
Re Trepca Mines Ltd. (No.2) [1963] Ch. 199, Wallersteiner v. Moir (No.2) [1975] QB 373,
Awwad v. Geraghty & Co. [2001] QB 570, and R. (Factortame Ltd.) v. Secretary of State for Transport (No. 8) [2003] QB 381,
all tending toward invalidity of “no win no fee” style arrangements.
The Court treated these as not representing Irish law, emphasising that Ireland must apply maintenance/champerty in light of constitutional access to courts.
The judgment’s preference for the more permissive approach is reinforced by:
Thai Trading Co. v. Taylor [1998] QB 781 (Millett L.J.), even though it was later disapproved in England,
including in Sibthorpe v. Southwark LBC [2011] EWCA Civ. 25, [2011] 1 WLR 2111.
Hogan J. found the concerns about lawyer conflicts and duties to court to be overstated in the Irish context, especially given entrenched practice.
(c) Irish constitutional and doctrinal authorities
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O’Keeffe v. Scales [1998] 1 IR 290: treated as a cornerstone—maintenance and champerty subsist, but must not be extended to deprive
persons of the constitutional right of access to the courts to litigate reasonably stateable claims.
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Greenclean Waste Management Ltd. v. Maurice Leahy & Co. (No.2) [2014] IEHC 314: cited (from Hogan J.’s own High Court judgment)
to underscore that the doctrines must be viewed in light of modern constitutional principles of access to justice.
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Persona Digital Telephony Ltd. v. Minister for Public Enterprise [2017] IESC 27, [2022] 2 IR 417: invoked to support the proposition
that a champertous or improperly maintained arrangement can affect proceedings directly; this underpinned the conclusion that champerty must be capable
of being raised as a defence.
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McHugh v. Keane, High Court, 16 December 1994 and Synott v. Adekoya [2010] IEHC 26: treated as reflective of Irish
courts proceeding on the assumption that “no foal, no fee” retainers can operate lawfully (including via implied terms).
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Attorney General (McGarry) v. Sligo County Council (No.2) [1991] 1 IR 99: used to articulate the indemnity principle
(liability to pay as a condition of recovery on party-and-party taxation). The Court accepted tension with “no foal, no fee”, but qualified the principle.
(d) “Inveterate” interpretation and stability
A notable methodological strand is the Court’s reliance on the stability of long-accepted interpretations and practice:
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Mogul of Ireland Ltd v. Tipperary (NR) County Council [1976] IR 260: relied upon for the proposition that even a questionable earlier
interpretation may be left undisturbed where it has become “inveterate” and reliance is widespread, such that overruling would cause greater harm.
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The Court acknowledged textual awkwardness in s. 11 of the Attorneys’ and Solicitors’ Act 1870 (“give validity” language), but held the
entrenched understanding since Jennings v. Johnson should not now be destabilised.
3.3 Legal Reasoning
(a) Champerty as a defence (a key corrective to the lower courts)
The High Court and Court of Appeal had held, in substance, that champerty was not available as a defence; a successful defendant’s remedy would lie
in a separate tort claim against the maintainer. Hogan J. rejected that approach:
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If champerty could not be raised defensively, defendants would be forced to litigate proceedings allegedly corrupting the administration of justice,
with uncertain and inadequate ex post remedies.
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The rationale of champerty/maintenance is to protect the integrity of justice; it must therefore be capable of operating within the proceedings
it taints.
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The Court indicated that otherwise Persona Digital Telephony Ltd. v. Minister for Public Enterprise [2017] IESC 27, [2022] 2 IR 417
could not have been decided as it was.
This aspect of the judgment is significant beyond tax debt litigation: it clarifies the procedural posture by which champerty points can be litigated,
and signals more direct scrutiny of funding/fee arrangements where properly raised.
(b) Conditional uplift fee (clause 5.3): from common law illegality to statutory permissibility
The Court’s reasoning is linear:
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At common law, percentage-of-recovery legal fees were champertous (Re A Solicitor [1912] 1 KB 302).
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The Oireachtas modified that position for debt/liquidated claims (formerly s. 68 of the 1994 Act; now s. 149(1)(a) of the 2015 Act).
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This case is precisely within the statutory exception (“seeking only to recover a debt or liquidated demand”).
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Therefore, the clause 5.3 remuneration structure is lawful, including “mixed” arrangements (fixed fees plus commission).
(c) “No foal, no fee” (clause 5.2): constitutionally-inflected common law continuity
Although clause 5.2 analysis was technically obiter, the Court set down a principled Irish position:
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Historically (pre-1922), “no foal, no fee” arrangements were regarded as lawful; that is the common law inherited into the State.
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Later English restrictions do not define Irish law; Irish courts must weigh constitutional access to courts (Article 34, Article 40.3.1°).
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The practice is entrenched, regulated (e.g., S.I. No. 644 of 2020 restricts how it may be advertised), and central to access to justice.
(d) Indemnity principle: maintained, but qualified
The taxpayers argued that party-and-party costs depend on a real legal liability to pay (Attorney General (McGarry) v. Sligo County Council (No.2) [1991] 1 IR 99),
which is absent if the solicitor is only paid on success. The Court responded in two ways:
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By analogy with McHugh v. Keane, “no foal, no fee” retainers can carry implied terms; upon a costs order (and recovery),
a liability to pay can be implied, aligning the bill with indemnity logic.
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The indemnity principle is important but not “inviolate”; insisting on its unqualified application would effectively outlaw an embedded access-to-justice
mechanism “by the backdoor”.
3.4 Impact
The decision has several likely effects:
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Debt recovery practice certainty: It confirms that percentage-based and “mixed” fee models in pure debt/liquidated-demand litigation are
lawful under s. 149(1)(a) of the 2015 Act, reducing the scope for champerty challenges in that category.
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Validation of an entrenched funding model: The Court strongly signalled that “no foal, no fee” is not per se unlawful in Ireland,
protecting a core mechanism by which litigants of modest means access representation.
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Procedural leverage for defendants: By holding that champerty can be a defence, the Court may increase scrutiny of litigation funding
structures (including those involving third parties), because parties can contest validity within the proceedings rather than only via later tort claims.
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Costs doctrine recalibration: The Court’s willingness to qualify the indemnity principle to accommodate “no foal, no fee” may affect
future disputes where retainers, recoverability, and disclosure of fee arrangements intersect.