Also known as: interest in the subject matter · interests in subject-matter · insurable interest
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
A beneficial ownership stake in property conveyed by gift or will. The stake is typically divided into successive interests such as a life estate held by a named individual or a remainder held by a described class.
A beneficial ownership stake in property conveyed by gift or will. The stake is typically divided into successive interests such as a life estate held by a named individual or a remainder held by a described class.
Select any source to read its text and confirm it supports the definition.
A personal financial or proprietary stake in the property or transaction that forms the basis of a lawsuit or other proceeding. The stake may trigger ethical bars on acquisition by counsel, rights to intervene, or judicial disqualification.
Select any source to read its text and confirm it supports the definition.
A personal financial or proprietary stake in the property or transaction that forms the basis of a lawsuit or other proceeding. The stake may trigger ethical bars on acquisition by counsel, rights to intervene, or judicial disqualification.
Each sense below has its own examples, sources, and questions.
Martin’s will left his insurance book of business to his daughter Erin for her lifetime, then to her children. Erin sold the entire book to Apex Insurance Group. After Erin died, her children claimed the post-death renewal commissions. The children held the remainder interest in the subject matter of the gift and therefore owned the commissions generated after Erin’s death.
An entrepreneur’s will left membership interests in SunPeak Solar to his son David and David’s children. At the entrepreneur’s death David had one child, Claire, and later had another. David received a life interest in the membership interests while Claire and her sibling received the remainder interest in the subject matter of the gift.
A life interest entitles the named individual to possession or income for the duration of that person’s life. The remainder interest belongs to the class members and becomes possessory only after the life interest ends.
Supporting sources
A plaintiff assigned a contract claim to a third party but retained no continuing stake in the underlying transaction. Because the assignor held no interest in the subject matter after the transfer, the assignment was not collusive and federal diversity jurisdiction remained proper.
Minority applicants sought to intervene in a challenge to a law school’s admissions policy. They claimed an interest relating to the admissions process that was the subject of the action. The court evaluated whether that interest in the subject matter satisfied the requirements for intervention of right.
A lease agreement designated an agent to accept service of process on behalf of the lessee. The lessee argued the designation was invalid because the agent had no independent interest in the subject matter of the dispute. The Supreme Court upheld the designation as sufficient to confer jurisdiction.
A lawyer acquires a prohibited interest by obtaining a direct ownership stake in the very property or rights whose title the lawsuit will determine. The prohibition does not apply to ordinary liens or contingent fees measured by a monetary recovery.
Supporting sources
The applicant must claim an interest relating to the property or transaction that is the subject of the action, show that disposition may impair the ability to protect that interest, and demonstrate that existing parties do not adequately represent it.
A judge must recuse when the judge, spouse, or minor child has a financial interest in the subject matter in controversy or in a party, or when any other interest could be substantially affected by the outcome.
Supporting sources
…entitled to intervene as a matter of right: (1) that the motion to intervene was timely; (2) that they have a substantial legal interest in the subject matter of the case; (3) that their ability to protect that interest may be impaired in the absence of intervention; and (4) that the parties already before the court may not adequately represent…