Also known as: maintenance · champerty · champertous · champerties · champerty and maintenance
Written by attorneys · grounded in primary & secondary sources — see below
A common-law doctrine that prohibits third parties from financing or acquiring an interest in litigation for profit. The doctrine bars officious intermeddling that encourages suits a party would not otherwise pursue. It historically prevented assignment of certain claims such as rights of entry and personal-injury torts.
Megan Moore, a shareholder, assigns her derivative claim against Millennium Media to an outside investor who agrees to fund the suit in exchange for half the recovery. The corporation moves to dismiss after qualified directors determine the action is not in the company's best interests. The court dismisses the proceeding because the assignment violates the prohibition on champerty.
Mason McCarthy hires an independent contractor to repair a walkway on his land. After the work is done, Mason assigns any future negligence claim against the contractor to a litigation funder who will pay the repair costs in return for a share of any judgment. When a pedestrian is injured, the funder sues. The court refuses to recognize the assignment because it constitutes champerty.
Mirage Hotels holds a junior mortgage on a commercial building and obtains a receiver who collects rents. A senior mortgagee later seeks its own receiver. The junior mortgagee attempts to sell its interest in the receivership proceeds to a litigation investor. The court rejects the assignment as champerty that encourages unnecessary litigation over rents.
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Ming Ma, an insurer, solicits and maintains a policy with a forum resident. After a loss, Ming assigns the coverage dispute to a third-party funder who will prosecute the claim for a percentage of the proceeds. The insured objects. The court holds the assignment invalid under the champerty doctrine because it promotes litigation for profit.
Miles Montgomery and Maya Malik enter a separation agreement that includes support payments. Miles assigns his right to future support to a litigation funder in exchange for an immediate cash advance. When the court reviews the agreement for unconscionability, it refuses to enforce the assignment because champerty is prohibited.
Mustafa Mahmoud's surviving spouse is entitled to a family allowance during estate administration. The spouse assigns the allowance to a third party who advances funds in return for a share of the estate distribution. The probate court invalidates the assignment on the ground that it violates the common-law rule against champerty.
Maintenance and champerty occur when a third party finances or acquires an interest in litigation for profit, encouraging suits that would not otherwise be brought. The doctrine historically barred assignment of rights of entry and personal-injury claims to prevent trafficking in lawsuits.
Yes. Courts continue to invalidate assignments of certain non-contractual claims, such as personal-injury torts, because they enable profit-driven litigation. The prohibition remains part of public policy even though some jurisdictions have narrowed its scope.
A lawyer's contingency fee is permitted because the attorney is providing professional services rather than merely purchasing a claim for profit. Champerty involves a stranger to the litigation who intermeddles solely to share in the proceeds.
…that decisions concerning construction on the landmark site are made with due consideration of both the public interest in the maintenance of the structure and the landowner’s interest in use of the property. See §§ 207-4.0 to 207-9.0. In the event an owner wishes to alter a landmark site, three separate procedures are…