Champerty Legal Definition:

When a person agrees to finance someone else's lawsuit in exchange for a portion of the judicial award.

Related Terms: Barrator , Maintenance , Litigation Loan

When a person agrees to finance someone else's lawsuit in exchange for a portion of the judicial award.

Russell on Crimes, 1826:

"Champerty is ... a bargain with a plaintiff or defendant ... to divide the land or other matter sued for between them if they prevail at law, whereupon the champertor is to carry the party's suit at his own expense."

Ontario's Champerty Act RSO 1897 Ch 327states this:

"Champertors be they that move pleas and suits, or cause to be moved, either by their own procurement, or by others, and sue them at their proper costs, for to have part of the land in variance, or part of the gains. All champertous agreements are forbidden, and invalid."

Champerty was once prohibited at common law, as a crime and as a tort but, more recently, abolished as prohibited conduct.

In McIntyre Estate v. Ontario (2002), 218 D.L.R. (4th) 193 at canlii.org/en/on/onca/doc/2002/2002canlii45046/2002canlii45046.html, a history of champerty was given.

"The relevant section in the English statute (repealed in 1967), like the sections in several other medieval statutes, addressed abuses that were known in the common law as champerty and maintenance.  Legal historians tell us that these medieval statutes were passed with a view to prohibiting particular practices that were prevalent in English medieval society.  In those times, there existed a practice of assigning doubtful or fraudulent claims to Royal officials, nobles and other persons of wealth and influence who would be expected to receive a more favourable hearing in court than the assignors.  Typically, these arrangements provided that the assignee maintain the action and that the proceeds of success would be shared between the assignor and assignee.  Over time, ... conditions in the administration of justice improved with the emergence of an impartial and independent judiciary...."

The Ontario Court of Appeal in McIntrye Estate, defined champerty in relation to the companion medieval tort/crime of maintenance:

"Maintenance is directed against those who, for an improper motive, often described as wanton or officious intermeddling, become involved with disputes (litigation) of others in which the maintainer has no interest whatsoever and where the assistance he or she renders to one or the other parties is without justification or excuse.  Champerty is an egregious form of maintenance in which there is the added element that the maintainer shares in the profits of the litigation.  Importantly, without maintenance there can be no champerty.

"The courts have made clear that a person’s motive is a proper consideration and, indeed, determinative of the question whether conduct or an arrangement constitutes maintenance or champerty.  It is only when a person has an improper motive which motive may include, but is not limited to, “officious intermeddling” or “stirring up strife”, that a person will be found to be a maintainer."

 

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