maintenance and champerty

maintenance and champerty

two former torts and crimes striking at a third party's support of another's litigation. Maintenance is the stirring up of litigation by supporting a party without having a just cause or excuse for so doing. Champerty is where the person maintaining is to be paid out of the supported proceedings. Both were abolished as torts or crimes by the Criminal Law Act 1967.
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The common law principles of maintenance and champerty have been held by the Hong Kong courts to continue to apply in Hong Kong and to prohibit third party funding of litigation, both as a tort and as a criminal offence, save in three exceptional areas: (1) where a third party has a legitimate interest in the outcome of the litigation; (2) where a party should be permitted to obtain third party funding, so as to enable him/her to have access to justice; and (3) in a miscellaneous recognised category of proceedings including insolvency proceedings.
The report recommends that the Arbitration Ordinance (Cap 609) should be amended to state that the common law principles of maintenance and champerty (both as to civil and criminal liability) do not apply to arbitration and associated proceedings under the Arbitration Ordinance.
The court declared the practice of advancing funds secured only by an interest in a pending lawsuit--and in this case, at a rate exceeding 180 percent per year--to be maintenance and champerty, both of which are prohibited by state statutes.
Surprisingly, none of the lower courts considered the issue of maintenance and champerty, instead agreeing with Rancman that the transactions were illegal under state usury laws.
Magoon: In 1910, the Hawaii Supreme Court enforced a contract which "appears to be of a champertous nature" because "[t]he conditions of society under which the law of maintenance and champerty originated no longer exist.
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