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 ?
(24) Through various case law and statutes, it is clear that jurisdictions have developed their own understanding of when a champertous act has taken place and how the offense should be handled.
(28) It is important to note New York City is the capital of the world financial market that regularly practices debt-trading techniques that legal minds could interpret as champertous. (29) So while some may argue that champerty, as the 19th Century English courts developed it, is dead, others realize that it has evolved similar to the markets it looks to regulate.
2013) ("Unless an exception applies, an agreement to finance litigation at one's own expense in exchange for a share of the proceeds is champertous where it is made for the purpose of stirring up and inducing litigation which otherwise would not be commenced."); Hayes v.
"The English view that the contingent fee is champertous has not been accepted either by the courts or the legislatures of the states." Youngwood, supra, at 332.
Brickman, whose entire attack on contingent-fee contracts focuses on the absence of risk in the usual contingent-fee representation, conceded that "the early cases on contingent fees did not dwell on the necessity of risk," but instead "focused on whether the contingent-fee arrangement was champertous and whether champerty violated public policy." Brickman, supra note 8, at 74.
By settling out of a lawsuit yet still retaining a financial interest in its outcome, is a settling defendant entering into an illegal,(3) champertous agreement?
At first look, then, a litigation loan agreement may seem champertous. However, a closer analysis of the "no interest in the controversy" element of champerty reveals a significant distinction between a champertous agreement and a litigation loan agreement.
(42) Conversely, others have eliminated the prohibition and therefore enforce champertous agreements, (43) arguing that the champerty doctrine is inapplicable to modern business (44) and that other principles of law can more effectively achieve the doctrine's goals.
(42) See, e.g., Rancman, 789 N.E.2d at 220-21 (describing the disincentives to settlement and tendencies to prolong litigation created by champertous agreements); id.
This Part will subsequently survey the champertous constituency--groups concretely affected by the state's approach in dealing with champerty.
As a result, few champertous contracts are made and fewer are challenged.
Part IV examines the practicability of contracting around champerty laws in light of modern conflicts law and concludes that three steps can be taken to create enforceable champertous agreements.