Champerty and maintenance are doctrines in common law jurisdictions that aim to preclude frivolous litigation: Maintenance is the intermeddling of a disinterested party to encourage a lawsuit. It is: "A taking in hand, a bearing up or upholding of quarrels or sides, to the disturbance of the common right." Champerty (from Old French champart) is the financial support, by a party not naturally concerned in the suit, of a plaintiff that allows them to prosecute a lawsuit on condition that, if it be brought to a successful issue, the plaintiff will repay them with a share of the proceed from the suit.
In Giles v Thompson Lord Justice Steyn declared: "In modern idiom maintenance is the support of litigation by a stranger without just cause. Champerty is an aggravated form of maintenance. The distinguishing feature of champerty is the support of litigation by a stranger in return for a share of the proceeds."
At common law, maintenance and champerty were both crimes and torts, as was barratry (the bringing of vexatious litigation). This is generally no longer so as, during the nineteenth century, the development of legal ethics tended to obviate the risks to the public, particularly after the scandal of the Swynfen will case (1856–1864). However, the principles are relevant to modern contingent fee agreements between a lawyer and a client and to the assignment by a plaintiff of his rights in a lawsuit to someone with no connection to the case. Champertous contracts can still, depending on jurisdiction, be void for public policy or attract liability for costs.
History
The restrictions arose to combat abuses in medieval England. Unscrupulous nobles and royal officials would lend their names to bolster the credibility of doubtful and fraudulent claims in return for a share of the property recovered. Speaking extrajudicially in the early seventeenth century, Lord Chief Justice Coke described the origins of maintenance in this way:
The comments were made in context of the court previously having been anxious to prevent a wide range of maintenance; the phrase "maintenance" had been used to apply not just to those who gave support in civil claims, but also to those who sought to maintain robbers, heretics and even "a new sect coming from beyond the sea, clad in white garments". Judicial independence was gradually established, however, and by the early 19th century Jeremy Bentham wrote:
By jurisdiction
Australia
In Australia, champerty and maintenance as common law causes of action (as either a crime or a tort) have mostly been abolished by statute. In New South Wales, champerty and maintenance were abolished by the Maintenance, Champerty and Barratry Abolition Act 1993. In Victoria, champerty and maintenance was abolished as a tort by section 32 of the Wrongs Act 1958, and as a crime by section 332A of the Crimes Act 1958.
Canada
In Canada, the common law crimes of champerty and maintenance were abolished, alongside all remaining common law offences except contempt of court, by the 1953 consolidation of the Criminal Code. However, champerty and maintenance remain torts in some Canadian jurisdictions.
In Ontario, champertous agreements are invalid under the Champerty Act, RSO 1897, c. 327.
England and Wales
Maintenance and champerty have not been crimes or torts since the passing of the Criminal Law Act 1967. However, the 1967 Act stated:
There are circumstances in which a non-party who funds litigation can be liable for costs, if the action fails.
For instance, in Re Oasis Merchandising Services Ltd the Court of Appeal reincarnated the tort against the assignment of a wrongful trading claim by a liquidator to a specialist litigation company to pursuing directors for wrongful trading. This has come under criticism given that claims against directors are enforced sub-optimally as company liquidators, typically accountants, are cautious to take on risks rather than save as much of the company as possible.
Hong Kong
In Hong Kong, champerty and maintenance were long thought to be obsolete both as a crime and a tort, but these two principles have been revived in recent years in response to the prevalence of recovery agents which present problems quite different from the mischief which historically these rules intended to combat.