In 2017, Tony Boyle got some free advice from some of the best legal minds in the state. 

I say free as Boyle did not pay the lawyers directly. But it was certainly costly, coming as it did after unsuccessful sojourns to both the High Court and the Supreme Court. 

Boyle was seeking approval to use third-party funding to finance his mammoth legal action against the State and the tycoon Denis O’Brien over the awarding of the second mobile phone licence in 1995.

Boyle’s consortium, Persona, controversially came second and has been pursuing a €500 million damages action ever since. But such cases cost substantial sums of money, and Persona sought approval to have a funding relationship with UK litigation funding firm Harbour declared legal.

The High Court rejected the application. So too did the Supreme Court. Both judged that the arrangement breached the ancient laws of champerty, which ban third-party funding of a court case.

But, during the cases, a number of judges offered some suggestions on how the matter could be dealt with elegantly. 

In his ruling at the time, Justice John MacMenamin raised the prospect of Persona selling shares to overcome the bar on champerty as an “open-ended” issue. In the Supreme Court hearing, Judge Frank Clarke said it was “not illegal if you buy the company”.

And that is exactly what Boyle and Michael McGinley, his longtime business partner, have just done. 

As Tom and I reported last week, a US fund has taken an equity position in Sigma Wireless Networks, the overall holding company behind the Persona bid. 

In company filings, Sigma Wireless Networks Limited states its business activity as: “The company and its subsidiary Persona Digital Telephony Limited continue to pursue legal action against the state relating to the awarding of the second GSM mobile licence.”

With its new funding secured, Persona will have the financial heft to pursue the action against the State and O’Brien, a bill that is estimated at around €25 million. 

Both Boyle and McGinley are successful businessmen, and have a reservoir of personal resources. Indeed, both have put substantial equity into the company to bankroll the case so far (Boyle told The Currency in a 2019 interview that it had cost €10 million up to that point). However, the move allows them to decouple their personal fortunes from that of the Persona action.

The case was delayed due to the work of the Moriarty Tribunal, and subsequent legal applications. However, next year, 30 years after O’Brien’s Esat Digifone was granted the licence, the Persona case is finally due to be held. 

In the aftermath of the tribunal’s report and the Supreme Court decision, Persona lodged a new statement that included claims of unjust enrichment against O’Brien, as he had been added to the case as a defendant after his own application.

While the findings of the tribunal’s report cannot be used as evidence in a legal action, the evidence given can be. 

And, based on that evidence, we know what the tribunal determined in its final report in 2011. 

The tribunal found that Michael Lowry, then minister for communications, delivered the State’s second mobile phone licence for O’Brien. It said O’Brien later sought to confer a material benefit on Lowry.

It found that O’Brien transferred £477,000 to various Lowry-controlled accounts, arranged for a US$50,000 loan to Fine Gael (it was returned) and supported Lowry in obtaining a £420,000 bank loan. Moriarty found that the payments were “demonstrably referable to the acts and conduct” of Lowry while he was minister.

O’Brien has publicly rejected the findings, but he never legally challenged them. In 2012, his legal adviser Paul Meagher explained the decision not to challenge the findings. 

“We made a decision, having watched the way challenges were going down there, how hard we fought to get people back to give evidence to prove that the licence was squeaky clean,” Meagher told me.

“Having achieved that aim — our main aim to prove that there was nothing untoward — we made that decision. I took the view and advised Denis, and he was not happy with the view that it was futile.”

As a result, the findings stand unchallenged. 

And those have been accepted by the State. 

Boyle made it clear repeatedly that he would have been willing to drop the entire case if the state paid his legal bills and took action against those implicated by the tribunal. He first made that point to me in a 2012 interview with RTÉ’s Prime Time, and he reiterated it once again in his 2019 interview with Sam Smyth.

The State never took him up on his offer. Now, with Boyle and McGinley having sold an equity position in the company pursuing the legal action, it is doubtful that such an offer would still stand. 

A new investor will be seeking a financial return on its investment.

As Boyle told the journalist Mark Tighe last year: “The trouble here is that if somebody comes and buys this company, which they have the right to do, they’re going to press the advantage here all the way. 

“They’d be pressing for billions in damages because that’s the scale of the potential loss here. All I want is to put the record straight, that’s it.”

It is a Kafkaesque position, with the State formally accepting the findings of a tribunal that cost €125 million, but still defending itself in an action that is ultimately based on the evidence that emerged during its headings.

The Government’s position around State litigation principles is clear. Last year, it adopted a document prepared by the Attorney General Rossa Fanning that identifies 15 guidelines for the conduct of future litigation by the State.

One of the new guidelines says the State should not take advantage of litigants with fewer resources. 

Another states: “The State will endeavour to avoid, prevent and limit the scope of legal proceedings wherever possible, including by giving consideration in all cases to alternative dispute resolution before initiating legal proceedings, in line with the provisions of Section 14(1) of the Mediation Act, 2017 and in other cases, by participating in alternative dispute resolution processes where appropriate.”

Boyle and Persona offered the State the opportunity to settle this case and move on. The offer was not accepted. Now, almost three decades after the lucrative licence was awarded, the Persona case will get its day in court. 

Elsewhere last week…

UK property group Hammerson last week wrote down the value of its flagship Irish shopping centre interests by a further 7.7 per cent in the first half of this year. By my calculations, extrapolating on data released by CBRE on yields, there has been a 27 per cent valuation decline (if we ignore rental growth) on shopping centres hugging the M50 in the last two years. Yet, international investors are increasingly looking to Irish retail assets. In an in-depth piece, I looked at the dynamics of retail property in Ireland.

Last week, Alice delved into An Bord Pleanála’s decisions in relation to wind energy. The industry is concerned that, despite strong national impetus, there are roadblocks at the county level because of the way County Development Plans are written, rewritten and then considered by An Bord Pleanála. Her analysis of over 60 ABP cases, focusing on 53, revealed a rising trend in refusals tied solely to the development plan.

Both Dublin and London’s stock exchanges have suffered high-profile departures in recent years. Labour is working to bring a stuttering LSE back to life as Ireland grapples with its own efforts to rekindle listings. Michael and Jonathan wrote about the efforts being planned to secure new listings. Meanwhile, Michael wrote about the impact of a potential plan to put stamp duty on share buybacks.

The London-based fintech Revolut has finally been awarded a banking licence from UK regulators after a lengthy three-year process. Michael explained how it will add further legitimacy to its Irish mortgage products.

Based on draft findings, ex-INM chairman Leslie Buckley is happy for the High Court to publish an inspectors’ report into corporate governance issues at the media group under its previous owners. Ahead of its expected publication this week, Francesca wrote about what we can guess about the lengthy INM inspectors’ report.