Chamberty

A relationship arises when third parties unrelated to a litigation provide material support to litigants in exchange for consideration contingent on the outcome of the litigation. Often that relationship–between the third party and the litigant–is known as champerty. The most basic champerty scheme occurs when a third party provides material support to a party to a lawsuit on the condition that the litigant shares with the supporter any of the proceeds won from the litigation. The third-party supporter must have no bona fide interest in the case; the sole benefit is pecuniary. In the United States, the legality of champerty varies state to state; sixteen permit it explicitly by statute and twelve permit it implicitly.