champerty

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champerty

n. an agreement between the party suing in a lawsuit (plaintiff) and another person, usually an attorney, who agrees to finance and carry the lawsuit in return for a percentage of the recovery (money won and paid.) In Common Law this was illegal on the theory that it encouraged lawsuits. Today it is legal and often part of a "contingent fee" agreement between lawyer and client. It is not the same as barratry which is active encouragement of lawsuits. (See: barratry)

champerty

see MAINTENANCE AND CHAMPERTY.

CHAMPERTY, crimes. A bargain with a plaintiff or defendant, campum partire, to divide the land or other matter sued for between them, if they prevail at law, the champertor undertaking to carry on the suit at his own expense. 1 Pick. 416; 1 Ham. 132; 5 Monr. 416; 4 Litt. 117; 5 John. Ch. R. 44; 7 Port. R. 488.
     2. This offence differs from maintenance, in this, that in the latter the person assisting the suitor receives no benefit, while in the former he receives one half, or other portion, of the thing sued for. See Punishment; Fine; Imprisonment; 4 Bl. Com. 135.
     3. This was an offence in the civil law. Poth. Pand. lib. 3, t. 1; App. n. 1, tom. 3, p. 104; 15 Ves. 139; 7 Bligh's R. 369; S. C. 20 E. C. L. R. 165; 5 Moore & P. 193; 6 Carr. & P. 749; S. C. 25 E. C. L. R. 631; 1 Russ. Cr. 179 Hawk. P. C. b. 1 c. 84, s. 5.
     4. To maintain a defendant may be champerty. Hawk. P. C. b. 1, c. 84, s. 8 3 Ham. 541; 6 Monr. 392; 8 Yerg. 484; 8 John. 479; 1 John. Ch. R. 444;, 7 Wend. 152; 3 Cowen, 624; 6 Cowen, 90.

References in periodicals archive ?
1991) (holding that an agreement to share in litigation proceeds was not champertous because it was entered into as part of a broader agreement to settle other, ongoing litigation).
In states such as Florida and North Dakota, a contract is not champertous unless the champertor, acting as an "officious intermeddler," provoked or guided the suit.
Other states' courts strike down agreements that, while not technically champertous, are close enough to draw judicial ire.
Therefore, champerty's presence in caselaw is limited by the volume of champertous contracts.
41) The idea that champertous litigation contracts have not surfaced in these states in a century strains credulity.
44) If a champertous agreement is contested, Massachusetts resolves that "[w]e shall be guided in our analysis by a rule of what is fair and reasonable, looking to all of the circumstances at the time the arrangement is made to determine whether the agreement should be set aside or modified.
49) Even if every champertous contract were a win-win proposition, an unregulated private market for champerty would impose substantial externalities on and through the court system.
Because investing in litigation is illegal, champertous agreements are void.
103) The district court held that the assignment agreement was champertous and illegal under Pennsylvania law and dismissed the suit with prejudice as to Kline but without prejudice as to the company.
By dismissing the suit with prejudice only as to Kline, the champertous assignee, the Third Circuit held that a defendant has standing to raise the defense of champerty against an assignee suing in its own name, but that an assignor does not forfeit its rights in the action by virtue of its champertous agreement.
107) Nevertheless, champertous agreements may be void as contrary to California public policy,(108) although there is a dearth of California precedent finding champertous agreements void as against public policy.
In one sense, the civil law approach to champerty favors defendants because it grants them an independent, enforceable right of redemption, whereas under the common law of champerty, the defendant often lacks standing to challenge a champertous agreement.