One guilty of champerty; one who purchases a suit, or the right of suing, and carries it on at his or her own expense, in order to obtain a share of the gain.
What is champertor?
Key takeaways
- Champertors invest in lawsuits for profit.
- They pay legal costs in exchange for a share of winnings.
- Champerty is often seen as unethical or illegal.
In plain English
A champertor is someone who finances a lawsuit with the goal of sharing any winnings. They pay the legal fees and expenses in return for a portion of the money won from the case. This practice can raise ethical concerns and is often restricted by law.
Why champertor matters
Understanding champerty is important because it relates to the integrity of the legal system. Allowing individuals to profit from financing lawsuits can lead to abuse, where people might pursue cases solely for financial gain rather than justice. Some jurisdictions have laws against champerty to prevent such issues.
How champertor works in practice
In practice, a champertor identifies a legal case with potential for profit and agrees to cover the plaintiff's legal expenses. If the case is successful, the champertor receives a portion of the settlement or damages awarded. Various states have laws regulating or prohibiting champerty, aiming to maintain ethical standards in litigation.
Examples
Scenario: Maria, a champertor, funds James's lawsuit against a company for unpaid wages.
Outcome: If James wins, Maria gets a share of the damages.
Scenario: Aisha invests in a legal case involving a car accident, covering costs upfront.
Outcome: If the case succeeds, Aisha receives a percentage of the settlement.
Frequently asked questions
What is champerty?
Champerty involves someone funding a lawsuit to share in potential profits.
Why is champerty considered unethical?
It may encourage frivolous lawsuits and undermine the legal system's integrity.
How does champerty work in practice?
A champertor pays for legal costs and gets a share of any winnings if the case is successful.