Champertous Agreement

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Definition

A contract where a third party finances litigation in exchange for a percentage of the settlement or judgment—now illegal in most jurisdictions. It's the legal equivalent of loan-sharking for lawsuits.

Example Usage

That financing arrangement with the litigation funder looked suspiciously champertous to me.

Origin

Medieval English law; from 'champart' (sharing of crops)

Fun Fact

Modern litigation funding has created a grey area around what constitutes illegal champerty

Source: Legal ethics and history

Related Terms

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