Legal Definitions - champerty

Champerty is when someone who is not involved in a lawsuit gives money or other support to one of the parties in exchange for a share of any money won in the lawsuit. This is different from maintenance, where someone helps a party in a lawsuit without expecting anything in return. Champerty is often used to describe a situation where a third party invests in a lawsuit in exchange for a share of the winnings.

• A wealthy investor gives money to a plaintiff in a lawsuit in exchange for a share of any money won in the lawsuit.
• A lawyer agrees to represent a client in a lawsuit in exchange for a share of any money won in the lawsuit.

These examples illustrate champerty because in both cases, someone is providing support to a party in a lawsuit in exchange for a share of any money won in the lawsuit. In the first example, the investor is not involved in the lawsuit but is providing financial support. In the second example, the lawyer is providing legal support in exchange for a share of the winnings.

Champerty is controversial because it can be seen as encouraging frivolous lawsuits and prolonging litigation. However, supporters argue that it allows people who might not otherwise be able to afford legal representation to pursue meritorious claims. The legality of champerty varies by state, with some states explicitly allowing it and others considering it illegal.