Define: Champertor

Champerty is a legal term that refers to an agreement between a third party and a party involved in a lawsuit, where the third party agrees to finance the litigation in exchange for a share of the proceeds.

Champerty is generally considered illegal in many jurisdictions, as it promotes unethical behavior and can lead to abuse of the legal system.

Champerty is illegal because it can create conflicts of interest, encourage frivolous lawsuits, and undermine the integrity of the legal process.

Some jurisdictions have recognized certain exceptions to the illegality of champerty, such as when the third party is a legitimate litigation funder or when the agreement is entered into for a valid commercial purpose.

Engaging in champerty can result in various consequences, including the agreement being declared unenforceable, monetary penalties, and disciplinary action against the lawyers involved.

In some cases, a defendant may raise champerty as a defence to challenge the validity of a lawsuit. However, the success of such a defence will depend on the specific laws and regulations of the jurisdiction.

While champerty involves third-party financing of litigation, it is generally distinguished from legitimate litigation financing arrangements, which are subject to specific regulations and oversight.

Yes, there are various alternatives to champerty for financing litigation, such as traditional bank loans, personal savings, crowdfunding, or contingency fee arrangements with lawyers.

If you suspect champerty in a lawsuit, it is advisable to consult with a legal professional who can assess the situation and provide guidance on the appropriate course of action.