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Champerty and maintenance

Champerty and maintenance are common law doctrines prohibiting third-party support for litigation in which the supporter holds no legitimate interest, with maintenance encompassing general assistance such as funding or encouragement of suits, and champerty specifically denoting an agreement whereby the third party finances the action in return for a share of any proceeds recovered.^[1]^[2] These principles emerged in medieval England to deter the stirring up of vexatious lawsuits, which could disturb public peace and overburden the courts, often linked to historical practices where lords or speculators exploited legal processes for gain.^[3]^[4] Historically rooted in efforts to preserve judicial integrity against speculative or malicious intermeddling, the doctrines treated champerty and maintenance as both criminal offenses and civil torts, rendering related agreements void and exposing participants to penalties.^[5]^[6] Over time, exceptions developed for legitimate interests, such as family members aiding relatives or insurers defending policyholders, while statutory reforms and judicial reinterpretations in various jurisdictions mitigated their scope, particularly distinguishing them from permissible contingency fee arrangements between attorneys and clients.^[4]^[7] In contemporary common law systems, champerty and maintenance have largely fallen into desuetude or been abolished, though they retain vitality in select contexts like regulating third-party litigation funding to prevent undue influence or conflicts of interest in high-stakes disputes.^[8]^[9] Debates persist over their application to modern commercial litigation finance, with proponents arguing such funding democratizes access to justice for impecunious plaintiffs, while critics invoke the original rationales to caution against commodifying claims and incentivizing frivolous actions.^[10]^[11] Jurisdictional variations abound, with outright bans in some U.S. states contrasting permissive frameworks elsewhere that prioritize economic efficiency over archaic prohibitions.^[12]

Definitions and Core Concepts

Maintenance

Maintenance denotes the provision of support, typically financial or otherwise, by a third party lacking any legitimate interest in the litigation's outcome, to enable or encourage the prosecution or defense of a suit.^[13] This intermeddling constitutes an improper interference aimed at sustaining quarrels not one's own, distinguishing it from legitimate assistance such as that from family members or those with pre-existing ties to the dispute.^[14] At common law, maintenance encompassed not only funding but also advisory or evidentiary aid that improperly bolsters a party's position without justification.^[15] The doctrine traces its roots to medieval English law, where it emerged as a mechanism to prevent the abuse of royal courts by powerful lords who might otherwise sustain baseless claims through retainers or alliances, with early judicial recognitions appearing by the late 13th century.^[16] By the 14th and 15th centuries, maintenance actions proliferated, often involving writs of conspiracy or trespass against maintainers, reflecting concerns over the corruption of justice through external influence.^[17] Historically, it was treated as both a criminal offense and a tort, punishable by fines, imprisonment, or damages, underscoring its role in upholding procedural purity.^[15] Core to maintenance is the absence of bona fide motive; mere altruism or friendship does not suffice if it promotes litigation without probable cause, as courts scrutinized the maintainer's intent to ensure no speculative or vexatious ends.^[8] Public policy rationales include deterring the proliferation of unfounded suits that burden judicial resources and shielding vulnerable parties from coerced or manufactured disputes.^[13] Unlike champerty, which requires the supporter to bargain for a contingency interest in the recovery, maintenance stands alone as broader support without such profit-sharing.^[1] In practice, elements typically include: (1) third-party involvement without legal stake; (2) material assistance altering the suit's viability; and (3) lack of justifiable cause, as evidenced in precedents where unsolicited funding for dubious claims triggered liability.^[14] While abolished as a crime in many jurisdictions by the 19th century—such as under England's Criminal Law Act 1967—civil remedies persist where agreements facilitate abusive process.^[18] Modern applications scrutinize arrangements like conditional fee agreements to avoid veiled maintenance, prioritizing access to justice without endorsing gambling on outcomes.^[8]

Champerty

Champerty constitutes an agreement in which a third party, who has no legitimate or pre-existing interest in the underlying dispute, funds or otherwise supports a litigant's prosecution or defense of a lawsuit in return for a share of any proceeds or recovery obtained.^[13] This arrangement is typically contingent, meaning the funder assumes the risk of loss while profiting only from success, often through a percentage of the award or settlement.^[19] Unlike broader forms of intermeddling, champerty's defining feature is the bargain for a proprietary interest in the litigation's outcome, which historically rendered such contracts void and enforceable neither by the champertor nor against the litigant. The doctrine originates from English common law, where it evolved as an aggravated subset of maintenance—defined as any officious support of litigation by a disinterested outsider—by incorporating the element of profit-sharing that incentivizes speculative pursuit of claims.^[20] Core elements generally include: (1) the involvement of a stranger to the suit lacking any independent stake, such as a familial or financial tie; (2) provision of material assistance, including payment of costs, fees, or other expenses; and (3) a stipulation for remuneration derived directly from the suit's fruits, rather than a fixed fee or collateral benefit.^[4] Courts assessing champerty examine the totality of the agreement, invalidating it if the third party's role effectively transforms the litigation into a venture for personal gain without genuine alignment with the litigant's interests.^[21] In jurisdictions retaining the doctrine, champerty serves to deter agreements that could encourage baseless or exaggerated claims by aligning incentives toward aggressive, high-risk litigation over merit-based resolution.^[8] Enforcement varies, with some common law systems, such as certain U.S. states, treating violations as tortious or criminal offenses punishable by fines or imprisonment, while others limit remedies to contract unenforceability.^[19] Modern applications often scrutinize contingency fee structures or assignments of claims to ensure they do not cross into prohibited territory, though statutory reforms in places like the United Kingdom since 1967 have narrowed its scope to permit certain funded arrangements absent abuse.^[22]

Historical Development

Origins in Medieval Common Law

The doctrines of maintenance and champerty originated in late 13th-century England amid efforts to curb abuses of emerging common law procedures by feudal lords and retainers, who leveraged litigation to oppress rivals, seize lands, or extract concessions. Maintenance—providing financial or other support to litigants without a legitimate stake—was first statutorily prohibited under Edward I by the Statute of Westminster I (1275), particularly chapters 25, 28, and 33, which targeted the "stirring up" of suits, embracery of jurors, and undue influence by "great men" to pervert justice.^[17] ^[23] These provisions responded to parliamentary complaints of riots, false claims, and procedural manipulations that undermined royal courts' nascent authority over feudal disputes. Champerty, a aggravated form involving support in exchange for a share of any recovery, was implicitly encompassed as it incentivized speculative "gambling" on outcomes, exacerbating maintenance's harms by aligning third-party interests with prolonged or frivolous proceedings.^[17] ^[4] Subsequent medieval statutes built on this foundation, reflecting persistent enforcement challenges in a society where patronage networks enabled powerful magnates to fund proxy suits against weaker parties, often tenants or disfavored heirs. The Statute of Westminster II (1285, c. 49) and Articuli super Cartas (1300, c. 11) extended penalties for maintainers who "sustain quarrels" through false testimony or procurement, while 20 Edward III (1346, cc. 4–6) and 1 Richard II (1377, c. 4) imposed fines, imprisonment, and forfeiture to deter such practices amid recurring petitions decrying misgovernance and obstructed justice.^[17] These laws were penal in nature, treating violations as crimes against public order rather than mere civil wrongs, with sanctions including triple damages recoverable by aggrieved parties from the reign of Edward III onward. Early common law precedents, though sparse before the 15th century, reinforced statutory intent by voiding champertous agreements and punishing intermeddlers, as seen in yearbook reports limiting lawful aid to kin, lords for tenants, or charitable cases for the indigent.^[17] ^[4] The medieval framework prioritized causal deterrence of vexatious litigation over access to justice, rooted in the era's limited judicial resources and vulnerability to elite capture; exceptions evolved judicially to accommodate feudal hierarchies (e.g., a lord aiding a servant's claim, as in Pomeroy v. Abbot of Bukfast, 1442), but core prohibitions endured to safeguard impartiality.^[17] Debates persist on precise antecedents—some tracing roots to Norman protections of conquest-era property or even Roman influences—but empirical evidence from rolls and statutes confirms the doctrines' crystallization under Edward I as pragmatic responses to documented procedural abuses, not abstract moralism.^[4]

Evolution Through English Precedents

The doctrines of maintenance and champerty, initially rooted in medieval concerns over feudal abuses, evolved through English common law precedents that interpreted and refined early statutory prohibitions, emphasizing public policy against stirring up litigation. The Statute of Westminster I (1275), which barred court officials and attorneys from maintaining suits, served as a foundational reference, with subsequent judicial decisions applying its principles to broader intermeddling. By the 14th century, the Ordinance against Conspirators (33 Edw. I, 1304) reinforced these restrictions, and courts began treating champerty—where a maintainer sought a share of the proceeds—as an aggravated form of maintenance, punishable as a misdemeanor at common law.^[24] In the 16th century, precedents further delineated related offenses, such as the Case of Barretry (1588), which defined barretry as the habitual practice of maintenance or champerty, distinguishing it from isolated acts and establishing it as indictable when undertaken professionally to excite quarrels. This case, reported in 8 Rep 36b and 77 ER 5, underscored the common law's intent to curb professional stirrers of strife, building on Elizabethan statutes like 30 Eliz. c. 7 (1588). Over the following centuries, judicial interpretations introduced exceptions, such as for those with a legitimate interest or aiding the poor, as seen in late 18th-century rulings like Wallis v Portland, which affirmed the core principle that litigation should generally be self-funded to avoid speculation.^[24] The 19th century marked a gradual softening through precedents that balanced prohibition with access to justice. In Bradlaugh v Newdegate (1883) 11 QBD 1, the court questioned the medieval-era strictness of the rules, allowing certain third-party support where no officious interference was evident, reflecting evolving societal views on funding legitimate claims. Similarly, Alabaster v Harness 1 QB 339 permitted trade union funding of members' disputes, carving out exceptions for collective interests and signaling judicial willingness to adapt the doctrines amid industrialization and labor organization. These cases preserved the public policy rationale against trafficking in lawsuits but narrowed absolute bans, influencing later reforms.^[24] By the 20th century, precedents continued this trend toward pragmatism, with the Criminal Law Act 1967 (ss. 13-14) abolishing maintenance, champerty, and barretry as crimes and torts, though courts retained them as grounds for voiding agreements contrary to public policy. Early post-abolition cases, such as those interpreting the Act, confirmed that while criminal sanctions ended, the underlying common law principles persisted to prevent abuse, as affirmed in subsequent rulings emphasizing case-by-case assessment over rigid prohibition. This evolution reflected a shift from punitive medieval controls to a more nuanced framework, prioritizing empirical prevention of vexatious suits while accommodating modern funding needs.^[24]^[13]

Public Policy Rationales

Preventing Frivolous and Vexatious Suits

The doctrines of champerty and maintenance historically functioned as safeguards against the proliferation of meritless litigation by discouraging disinterested third parties from financing lawsuits that a plaintiff might otherwise abandon due to financial constraints or evidentiary weaknesses. In medieval England, where these rules originated around the 13th to 14th centuries, powerful nobles could exploit the legal system by funding suits against adversaries for purposes of harassment or personal vendetta, unburdened by personal risk, thereby imposing undue costs on defendants and straining nascent judicial resources.^[13] By rendering such agreements void and potentially tortious, the doctrines eliminated the economic incentives for "stirring up" vexatious claims, ensuring that only parties with a genuine stake—such as the litigant themselves—would pursue actions with sufficient probable cause.^[3] This preventive mechanism operated on the principle that third-party funding introduces speculative elements, transforming litigation into a wager on judicial outcomes rather than a pursuit of legitimate redress. Without a legitimate interest, funders might prioritize volume over viability, backing multiple low-merit cases in hopes of occasional windfalls, which could overwhelm courts with baseless proceedings and erode public trust in the judiciary.^[25] English common law precedents, such as those from the 16th century onward, reinforced this by invalidating champertous bargains that shared proceeds, viewing them as conducive to "malicious" or frivolous pursuits driven by the maintainer's ulterior motives rather than the suit's intrinsic justice.^[3] The rationale emphasized causal deterrence: absent these prohibitions, the removal of financial barriers for weak claims would causally increase their filing rate, as evidenced by historical concerns over "officious intermeddling" that prolonged disputes without resolution.^[13] In practice, the doctrines complemented other common law tools, such as requirements for probable cause in affidavits of merit, to filter out vexatious suits at inception. Courts held that maintenance encouraged "groundless" actions by offsetting the plaintiff's costs, while champerty amplified this risk through profit-sharing, potentially incentivizing attorneys or funders to solicit clients for speculative ventures.^[3] This dual prohibition thus preserved judicial efficiency by aligning litigation incentives with substantive merit, a policy echoed in early American jurisdictions that adopted English rules to avert similar abuses in colonial dispute resolution.^[25] Empirical parallels in modern critiques, though not directly historical, underscore the enduring logic: jurisdictions relaxing these bans have observed correlated rises in funded marginal claims, validating the original causal concern that unfettered third-party involvement distorts case selection toward profitability over validity.^[11]

Discouraging Speculation and Gambling on Litigation

The doctrine of champerty has historically been justified as a safeguard against treating litigation as a form of gambling, where third parties wager financial support on the uncertain outcome of a suit in pursuit of a share of any recovery, without bearing the typical risks or having a legitimate personal stake.^[19] This arrangement resembles betting, as the champertous funder incurs costs only if the case proceeds but stands to gain disproportionately from success, potentially incentivizing the pursuit of claims based on probabilistic returns rather than substantive merit.^[3] Courts and legal scholars have reasoned that such speculation commodifies judicial processes, diverting them from resolving genuine disputes to speculative ventures that could multiply baseless actions and strain public resources.^[26] From a causal standpoint, absent restrictions on champerty, third-party funders—lacking direct injury or accountability to the defendant—may rationally prioritize high-risk, high-reward cases, amplifying the volume of suits where the expected value hinges on aggressive tactics rather than evidentiary strength.^[27] Historical English common law precedents, such as those condemning agreements that "stir up" litigation for profit, emphasized that this dynamic perverts the remedial purpose of law by fostering corrupt practices, including witness tampering or inflated claims to maximize payouts, akin to wagering on uncertain events like horse races.^[3] Empirical observations in jurisdictions enforcing anti-champerty rules, such as certain U.S. states, link the doctrine to reduced instances of "patent troll" behaviors, where entities acquire and fund weak intellectual property claims solely for settlement leverage, illustrating how speculation distorts market incentives toward abuse rather than innovation.^[28] Proponents of the policy argue that genuine litigants, compelled to invest their own resources, exercise restraint in initiating proceedings, filtering out marginal claims through personal cost-benefit calculus; third-party funding disrupts this by externalizing risks and aligning incentives with volume over quality.^[29] This rationale persists in modern critiques, where even in reformed systems, champerty voids agreements that enable "officious intermeddlers" to hijack suits, as seen in Minnesota appellate rulings deeming such pacts unenforceable for promoting speculative pursuits over legitimate redress.^[30] While some jurisdictions have relaxed prohibitions to accommodate commercial funding, the core concern remains that unchecked speculation elevates litigation frequency—evidenced by rising "social inflation" in insurance claims tied to funded mass actions—potentially overwhelming courts and eroding public trust in adjudication as a truth-seeking mechanism rather than a profit engine.^[31]^[19]

Safeguarding Judicial Independence and Resources

The doctrines of champerty and maintenance historically and doctrinally function to preserve judicial independence by insulating court proceedings from external financial influences that could distort the adversarial process and compromise the impartiality of judicial decision-making. By prohibiting third parties from funding or acquiring interests in litigation without a legitimate stake, these rules mitigate risks of manipulation, such as funders pressuring litigants to pursue aggressive tactics, inflate claims, suppress evidence, or suborn witnesses for personal gain, which could undermine the courts' role as neutral arbiters.^[13] This protection aligns with the public policy aim of maintaining the "purity of justice," ensuring that litigation reflects genuine grievances rather than speculative ventures driven by profit motives that might erode public confidence in judicial outcomes.^[13] Furthermore, these prohibitions safeguard finite judicial resources by curbing the influx of vexatious, speculative, or frivolous suits instigated or prolonged by third-party intermeddlers lacking personal involvement in the underlying dispute. Without such restraints, officious funding could multiply baseless claims, leading to court congestion, delayed resolutions for meritorious cases, and inefficient allocation of taxpayer-supported judicial infrastructure, as evidenced in jurisdictions where relaxed funding rules have correlated with heightened litigation volumes.^[3]^[32] The doctrines thus promote a balanced caseload, prioritizing disputes with intrinsic merit over those amplified by external capital, which preserves the remedial integrity of the legal system and prevents the perversion of courts into arenas for gambling or harassment.^[3] In practice, this rationale underscores why champertous agreements are deemed void as against public policy: they incentivize the disturbance of societal peace through needless contention, straining judicial bandwidth and diverting resources from substantive justice.^[33] Historical precedents, rooted in medieval English common law, emphasized preventing corrupt nobles from abusing the system via funded vexation, a concern that persists in modern critiques of unregulated third-party funding as potentially overburdening courts and fostering systemic inefficiencies.^[3]^[13]

Modern Context and Third-Party Litigation Funding

Rise of Commercial Litigation Funding

Commercial litigation funding, a subset of third-party litigation funding focused on financing disputes between businesses such as contract breaches, intellectual property claims, and insolvency proceedings, originated in Australia during the mid-1990s.^[34] This development followed the introduction of class action mechanisms in 1992 and the abolition of criminal offenses for maintenance and champerty in New South Wales in 1993, which removed longstanding common law barriers.^[5] A pivotal endorsement came in 2006 when Australia's High Court, in Fostif Pty Ltd v. Campbells Cash and Carry Pty Ltd, upheld the validity of third-party funding agreements, affirming they did not inherently offend public policy.^[5] This decision spurred the entry of specialized funders, exemplified by the founding of IMF Bentham in 2001, enabling corporations to pursue or defend meritorious claims without tying up capital.^[5] The practice subsequently expanded to other common law jurisdictions, including the United Kingdom and the United States, amid evolving judicial acceptance. In the UK, the 1967 Criminal Law Act had already conditionally permitted funding, but commercial adoption accelerated after Burford Capital's 2009 initial public offering and the 2012 Legal Services Act, which facilitated alternative business structures for legal services.^[5] In the US, where state-level champerty doctrines vary, commercial funding gained traction in the mid-2000s, with institutions like Credit Suisse launching dedicated strategies in 2006; by 2016, courts such as Delaware's Superior Court in Charge Injection Technologies, Inc. v. E.I. DuPont de Nemours & Co. rejected champerty challenges to funding agreements in business disputes.^[5]^[35] This spread was driven by funders providing non-recourse capital for litigation costs, allowing companies to manage risk and access justice against deeper-pocketed opponents. Market growth has been robust, transforming commercial litigation funding into a multi-billion-dollar asset class. In the US, capital committed to commercial cases reached $2.7 billion in 2023 alone, contributing to an estimated $15.2 billion in total investments that year.^[34] Globally, the litigation funding market, including commercial segments, exceeded $19 billion in 2024 and is projected to expand at a compound annual growth rate of approximately 10-11% through the 2030s, fueled by institutional investors viewing it as an uncorrelated return stream.^[36] Surveys indicate widespread adoption, with 83% of Australian lawyers and 63% in the UK reporting increased use by 2018, often in high-value commercial matters like class actions (funding 63% of Australian class actions from 2001-2017).^[5] Despite this proliferation, the industry remains lightly regulated, prompting ongoing debates over transparency and potential conflicts.^[35]

Conflicts with Traditional Doctrines

Third-party litigation funding (TPLF) inherently conflicts with the traditional doctrines of champerty and maintenance, as it involves non-parties advancing litigation costs in exchange for a percentage of the proceeds, directly replicating the champertous bargain prohibited under common law.^[13] ^[11] Historically rooted in medieval English practices to curb abuses by nobles who financed frivolous claims for profit, these doctrines sought to prevent speculation on lawsuits, witness tampering, and undue influence over litigants, thereby safeguarding the administration of justice from external manipulation.^[13] ^[11] In contrast, contemporary TPLF treats litigation as an asset class for investors, often hedge funds, who conduct due diligence but prioritize high returns, potentially incentivizing the pursuit or prolongation of marginally viable claims to maximize payouts rather than resolving disputes efficiently.^[34] ^[11] This tension manifests in enforceability challenges, where courts in doctrine-adherent jurisdictions may void TPLF agreements as against public policy, echoing concerns that funders' financial stakes erode litigant control and introduce conflicts akin to those the doctrines originally targeted.^[11] For instance, prior to reforms, U.S. states like Minnesota enforced champerty bans, ruling that third-party profit-sharing intruded on the judicial process by fostering a speculative market in claims, as in Maslowski v. Prospect Funding Partners LLC (2017), which invalidated such arrangements.^[11] Even where contingency fee arrangements for attorneys are permitted—distinguished by the lawyer's fiduciary duties—TPLF extends funding to strangers without such ethical constraints, raising risks of strategic distortions, such as aggressive settlement demands or appeals driven by investor interests over client welfare.^[19] ^[11] Reform efforts highlight the doctrinal rift: some courts, like Minnesota's Supreme Court in 2020, have abandoned common law champerty prohibitions, deeming them obsolete in an era of widespread contingency fees and ethical regulations that purportedly mitigate abuse risks without blanket bans.^[19] Yet critics, including business advocacy groups, contend this overlooks enduring policy rationales, arguing that TPLF commodifies justice, potentially increasing systemic costs through heightened litigiousness and bypassing traditional safeguards against maintenance by disinterested parties.^[11] ^[34] Such conflicts persist, as TPLF's non-recourse nature—repayment only upon success—amplifies gambling-like elements condemned historically, even if modern assessments focus on case-specific impropriety like excessive funder control rather than categorical invalidity.^[13]

Key Recent Developments and Reforms

In England and Wales, the Civil Justice Council issued a final report on July 3, 2025, recommending reforms to simplify the regulatory framework for third-party litigation funding in group actions, including enhanced disclosure requirements and liberalization to promote access while addressing risks of abuse.^[37] These proposals build on the 1967 Criminal Law Act's abolition of champerty and maintenance as crimes and torts, amid a market expansion where funded litigation assets grew from £198 million in 2011–2012 to £2.2 billion in 2022.^[38] Courts continue to enforce public policy limits, as seen in 2025 cases scrutinizing funder influence to prevent champertous overreach.^[39] In Australia, Western Australia enacted reforms via amendments to the Civil Procedure Act 2004 effective October 2022, introducing a class actions regime and abolishing the torts of maintenance and champerty to align with most other states and facilitate third-party funding for representative proceedings.^[40] This addressed prior barriers in a jurisdiction where such doctrines had persisted, enhancing access to justice in collective litigation while other states like Victoria and New South Wales had reformed earlier in the 1990s and 2000s.^[41] Federal discussions persist on greater transparency in funding agreements to mitigate speculative suits.^[42] In the United States, the Minnesota Supreme Court in Roland v. Garros (June 25, 2020) eliminated the state's common law ban on champerty, holding that third-party funding agreements are enforceable absent ethical violations or public policy conflicts, reflecting a trend toward permissiveness in commercial litigation.^[19] State-level variations remain, with calls for uniform disclosure mandates; a 2025 analysis urged courts and legislatures to require revelation of funding terms to curb undisclosed influences on settlements and judgments.^[43] Federally, no comprehensive reform has emerged, but empirical growth in third-party funding has prompted scrutiny in antitrust and mass tort contexts.^[34]

Controversies and Viewpoints

Proponents' Claims: Enhancing Access to Justice

Proponents of third-party litigation funding contend that relaxing traditional doctrines of champerty and maintenance promotes access to justice by enabling meritorious claims to advance despite financial barriers that would otherwise deter plaintiffs. These doctrines, historically prohibiting non-party funding of suits, are viewed as outdated impediments in modern contexts where litigation costs—often exceeding millions in complex commercial or collective actions—exclude all but the wealthiest litigants. By providing non-recourse capital, funders allow individuals, small and medium-sized enterprises (SMEs), and resource-constrained entities to pursue valid grievances against deeper-pocketed opponents, thereby leveling the adversarial playing field and ensuring that economic power does not dictate legal outcomes.^[44]^[45]^[46] In jurisdictions reforming champerty restrictions, such as England and Wales post-2011 precedents like Walters v. Babcock & Wilcox (which upheld conditional fee agreements influencing funding viability), proponents highlight funding's role in collective redress mechanisms. Under the UK's Consumer Rights Act 2015, opt-out collective proceedings have leveraged funding to represent UK citizens in litigation volumes eight times greater than comparable self-funded efforts, vindicating rights in mass consumer and shareholder disputes that individual claimants could not economically sustain. Similarly, public interest litigation, exemplified by the 2019 Bates v Post Office Horizon scandal case, relied on funding to expose systemic wrongdoing by a state-backed entity, compensating thousands who lacked means for protracted battles.^[44]^[44] Funders' rigorous due diligence—approving only 3-5% of approached cases based on merits and prospects—underpins claims that funding targets high-quality suits, not speculation, with empirical patterns in Australia (where champerty was statutorily curtailed by the late 20th century) showing correlated rises in caseloads interpreted as expanded access rather than frivolous filings. Proponents, including legal reform bodies, argue this selectivity mitigates abuse risks while amplifying enforcement of legal norms in areas like antitrust or product liability, where unaddressed claims erode public trust in justice systems.^[45]^[44]^[10]

Critics' Concerns: Incentivizing Abusive Practices

Critics argue that third-party litigation funding (TPLF) revives the historical abuses targeted by champerty and maintenance doctrines, by enabling non-parties to finance suits in exchange for a profit share, thereby incentivizing the pursuit of weak or speculative claims without personal risk to the funder or plaintiff. Under these arrangements, funders often evaluate cases based on settlement potential rather than merit, pressuring defendants into payouts to avoid protracted costs, even when liability is dubious; this mirrors the "officious intermeddling" prohibited by maintenance, as funders may dictate strategy, veto settlements, or prolong litigation to inflate returns.^[47] For instance, in the 2023 Sysco Corp. dispute with funder Burford Capital, the latter allegedly blocked a favorable settlement to pursue higher gains, illustrating how funder control can override plaintiff interests and ethical norms.^[48] Such dynamics foster abusive practices, including the proliferation of frivolous or low-merit suits, as evidenced by the TPLF industry's $15.2 billion in U.S. commercial litigation commitments in 2023 and $16 billion in assets under management by 2024, much of which supports mass tort campaigns and aggressive plaintiff recruitment.^[49]^[50] Critics highlight how funders back "strike suits" in areas like patent assertion by trolls, distorting markets through baseless assertions enabled by non-recourse capital, or in consumer lending where rates exceed 124%, trapping vulnerable plaintiffs in debt multiples—up to 10 times loans in New York City cases.^[28]^[51] This is compounded by deceptive advertising, with legal ads surging 44% on TV (16.4 million placements in 2023) and 261% on radio since 2017, often fearmongering via false implications of recalls or government probes to generate volume over validity, as flagged by the FTC in 2019.^[50]^[52] In high-stakes examples like the 2016 Bollea v. Gawker case, undisclosed funding by Peter Thiel—totaling millions against the media outlet for prior coverage—demonstrated how TPLF can weaponize litigation for ulterior motives, evading champerty scrutiny through secrecy and leading to the defendant's bankruptcy despite the suit's origins in a privacy invasion claim. Such opacity exacerbates judicial burdens, as courts face inflated dockets without insight into funder incentives, prompting calls for disclosure mandates to mitigate the "perverse incentives" that prioritize profit over justice.^[53] Overall, detractors contend these mechanisms erode deterrence against vexatious actions, historically curbed by common-law bars, by decoupling litigation costs from merit assessment.^[34]

Empirical Data and Causal Analyses

Empirical examinations of third-party litigation funding (TPLF), a modern analog to champerty, indicate selective case funding that prioritizes viability over volume. In Australia, data from the Impecunious Management Fund (IMF) between 2001 and 2010 reveal that funders evaluated 763 potential cases but funded only 91 (approximately 12%), reflecting stringent screening based on evidence strength, claim value (minimum AUD 750,000–2 million), and success probability thresholds exceeding 50%. Funded cases averaged 850 days in duration and exhibited markers of quality, including 38.7 citations by other cases (versus 19 for unfunded peers) and lower appellate reversal rates (25% versus 31%), suggesting TPLF supports precedents of enduring legal value rather than marginal disputes.^[10]^[10] No systematic evidence links TPLF to elevated frivolous filings; funded litigation correlates with enhanced case rigor, as profit-driven funders mimic insurers by rejecting high-risk, low-merit claims to safeguard returns. U.S. market data from 2021 show 47 active commercial funders committing $2.8 billion to new agreements, with reported returns of 91–93% on invested capital, underscoring economic incentives for due diligence amid nonrecourse structures where losses fall entirely on funders if plaintiffs fail. Yet, a 2022 U.S. Government Accountability Office (GAO) assessment highlights pervasive data gaps, including unreliable tallies of total funding volume, funder counts, and precise litigation impacts, complicating aggregate assessments of outcomes like settlement rates or dismissal probabilities.^[54]^[54]^[54] Causally, TPLF mitigates asymmetric information and capital constraints for plaintiffs, enabling claims with positive expected value that self-funding barriers would suppress, thereby approximating efficient market allocation of judicial resources without net proliferation of baseless suits—funders' skin in the game aligns interests toward validation over vexation. Theoretical models, however, posit an "arms race" dynamic: funding bolsters plaintiffs' persistence, potentially inflating defendant defense expenditures and deadweight losses from protracted disputes, though it may deter inefficient defendant actions ex ante. Critics, including business advocacy groups, contend TPLF incentivizes abuse by decoupling plaintiff risk from pursuit, citing anecdotal surges in mass tort filings, but such assertions lack causal controls and overlook funder selectivity; academic empirics, conversely, find no disproportionate frivolousness, attributing volume growth to unmasking viable cases rather than manufacturing them.^[55]^[55]^[51]^[10] These patterns hold despite source variances: funder self-reports (e.g., Burford Capital, Omni Bridgeway) emphasize high returns as validation of case quality, while GAO-noted expert panels, drawing from diverse stakeholders, underscore transparency deficits that obscure fuller causality, such as agency distortions where funders pressure settlements to recoup multiples exceeding 3–5 times investments. Overall, available data tilts against narratives of systemic abuse, favoring causal realism wherein TPLF's risk-sharing refines rather than corrupts dispute resolution, though judicial overload risks persist in under-resourced systems.^[54]^[54]

Jurisdictional Variations

England and Wales

In England and Wales, the common law doctrines of maintenance—providing financial support to litigants without a legitimate interest—and champerty—a subset involving an agreement to share in the proceeds of litigation—were historically criminal offenses and torts aimed at preventing the stirring up of frivolous suits and undue interference in judicial proceedings.^[13] These doctrines originated in medieval times to safeguard access to justice from speculative or abusive claims, with champertous agreements deemed void as contrary to public policy.^[22] The Criminal Law Act 1967 abolished maintenance and champerty as crimes under section 13 and as torts under section 14(1), removing civil and criminal liability for such conduct.^[56] Section 14(2) explicitly preserved their status as rules of public policy, meaning contracts involving maintenance or champerty remain potentially void or unenforceable if they undermine judicial integrity, such as by granting funders excessive control over litigation strategy or incentivizing baseless claims.^[56] Courts evaluate funding agreements on a case-by-case basis, assessing factors like the funder's involvement, profit motive, and risk allocation; agreements are upheld if they promote access to justice without abuse.^[57] Third-party litigation funding has flourished since the 1990s, facilitated by the Courts and Legal Services Act 1990 and Access to Justice Act 1999, which enabled conditional fee agreements and removed legal aid for many civil cases.^[8] The market, valued at over £2 billion in funded assets by 2023, supports commercial disputes, group actions, and international arbitration, with funders typically advancing costs in exchange for a percentage of recoveries (often 20-40%) upon success.^[57] Landmark cases like Giles v Thompson 1 AC 142 affirmed that legitimate funding arrangements, such as for credit hire claims, do not constitute champerty if the funder lacks a direct interest but shares risks proportionately.^[58] More recently, in Therapeutic Goods Administration v Kythera Biopharmaceuticals FCA 768 (applying English principles in a cross-border context), courts scrutinized funder control, voiding agreements where funders dictate settlements or evidence to prioritize returns over merits.^[9] No comprehensive statutory regulation exists, though the Legal Services Board initiated a review in 2023, culminating in a May 2024 report recommending voluntary codes over bans, citing insufficient evidence of systemic abuse despite concerns over "loser-pays" cost-shifting amplifying risks in funded class actions.^[59] Disclosure of funding arrangements is mandatory under Civil Procedure Rules Practice Direction 16, paragraph 7.1, to enable adverse costs orders against funders in abusive cases, as affirmed in Signature Litigation LLP v Ivanishvili EWHC 366 (Comm).^[60] Empirical data from the Association of Litigation Funders indicates funded success rates around 60-70% in commercial matters, suggesting funding correlates with viable claims rather than frivolous ones, though critics argue opaque economics may incentivize volume over quality.^[57] Persistent champerty challenges ensure funding remains a tool for meritorious disputes, balanced against public policy risks.^[8]

United States

In the United States, the common law doctrines of champerty and maintenance, derived from English precedents aimed at curbing speculative or vexatious litigation, are not codified at the federal level and instead vary significantly by state jurisdiction.^[1]^[61] Maintenance generally prohibits a disinterested third party from funding or supporting another's lawsuit, while champerty extends this to agreements where the funder seeks a percentage of any recovery as compensation.^[62]^[13] Historically, these rules sought to preserve judicial resources and prevent abuse, but U.S. courts have increasingly distinguished them from permissible practices like contingency fee arrangements, where attorneys' professional stakes justify aligned incentives.^[1] State approaches diverge: several jurisdictions, including New York (under Judiciary Law § 489), Delaware, Florida, Kentucky (KRS § 372.060), and North Carolina, maintain prohibitions via statute or common law, often voiding champertous contracts and exposing parties to penalties like fines or misdemeanor charges.^[63]^[19]^[64]^[64] In contrast, states such as Arizona, New Jersey, and recently Minnesota have rejected or abolished champerty restrictions; Minnesota's Supreme Court, in Maslowski v. Prospect Funding Partners LLC (944 N.W.2d 235, Minn. 2020), explicitly abrogated the doctrine as outdated and incompatible with modern access-to-justice needs, enforcing a non-recourse funding agreement for personal injury proceeds.^[65]^[66] This ruling aligned Minnesota with a broader trend where over half of states either never adopted strict bans or have eroded them judicially, enabling third-party litigation funding (TPLF) without rendering agreements per se invalid.^[67]^[8] The rise of TPLF, where investors finance cases for returns tied to outcomes, has prompted shifts from outright bans toward regulatory measures focused on transparency rather than prohibition.^[68]^[54] No comprehensive federal oversight exists, though federal courts apply state law in diversity cases and some circuits have scrutinized funding for ethical conflicts, such as in assignment-of-claim disputes.^[54]^[69] Recent state legislation, including in Arizona, Colorado, Georgia, Kansas, Montana (2023), and Oklahoma (as of 2025), mandates disclosure of funders' identities, funding terms, and control over litigation decisions to mitigate risks of abuse, without broadly criminalizing the practice.^[70] These reforms reflect empirical observations of TPLF's expansion—market size estimated at billions annually—while addressing concerns over non-party influence on settlements or strategy.^[34] In permissive states, courts enforce funding deals absent evidence of fraud or undue control, viewing them as legitimate risk-sharing absent the speculative malice historically targeted by champerty.^[19]

Australia and Other Commonwealth Nations

In Australia, the common law doctrines of maintenance—providing support to litigation without a legitimate interest—and champerty—funding litigation in exchange for a share of proceeds—have been significantly curtailed, facilitating the growth of third-party litigation funding. The High Court of Australia in Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd HCA 41 ruled that commercial funding agreements are not inherently champertous or contrary to public policy, provided they do not involve abuse of process or improper interference; instead, courts exercise supervisory jurisdiction to assess fairness and prevent officious meddling.^[71]^[8] This decision, the first by the High Court on the matter, upheld a funding arrangement in a class action despite challenges, emphasizing that historical prohibitions yield to modern access-to-justice considerations when funding is conditional on success and non-controlling.^[72] State-level reforms further eroded the doctrines' force. New South Wales abolished maintenance, champerty, and barratry as crimes and torts via the Maintenance, Champerty and Barratry Abolition Act 1993, removing statutory barriers to funding.^[8] South Australia and Victoria similarly eliminated them as both crimes and torts through legislation, such as section 32 of Victoria's Wrongs Act 1958.^[73] In contrast, Queensland, Tasmania, and the Northern Territory retain the torts without abolition, while Western Australia did so in 2022 alongside introducing a class actions regime under the Class Actions Act 2022 (WA), aligning with recommendations from the Law Reform Commission of Western Australia.^[74]^[40] Despite variations, Australian courts routinely approve funding in class actions—over 100 funded proceedings filed federally by 2020—viewing it as enhancing access where costs deter meritorious claims, though subject to disclosure and approval to mitigate risks of overreach.^[75] Among other Commonwealth nations, New Zealand treats maintenance and champerty as persisting common law torts rather than crimes, yet permits third-party funding without statutory prohibition, provided agreements avoid unjustified interference or profit-sharing that offends public policy.^[76] Courts exercise inherent supervisory powers over funding in representative proceedings, as affirmed in cases like Credit Suisse AG v Waterloo NZHC 1618, requiring funders to demonstrate arm's-length dealings and reasonable terms to prevent abuse, with funding enabling group litigation since the 2006 amendments to the High Court Rules.^[77] No dedicated regulatory framework exists, but the government has considered reforms amid rising class action volumes, balancing access against concerns over speculative suits. In Canada, champerty and maintenance were abolished as common law crimes by the Criminal Code in 1953 but endure as torts in most provinces, subject to judicial scrutiny rather than blanket bans on funding.^[78] Provincial variations persist: Ontario retains a statutory prohibition under the 1897 Champerty Act (R.S.O. 1897, c. 327), yet courts approve funding agreements deemed non-champertous if funders lack control and claims are viable, as in Drywall Acoustic Lathing Insulation Ontario v SNC-Lavalin Group Inc. (2011).^[79] Alberta and British Columbia explicitly recognize them as torts, requiring funding to show legitimate interest or public benefit to avoid liability.^[80] Overall, litigation funding thrives in class actions under provincial regimes, with over CAD 1 billion invested annually by 2021, courts enforcing disclosure and security for costs to curb excesses while prioritizing access for impecunious plaintiffs.^[81]

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