What is champerty?

Champerty, along with maintenance (of which champerty is an aggravated form), is a common law doctrine that traces its origin to the medieval period. The doctrine of maintenance was directed "against wanton and in officious intermeddling in the disputes of others in which the intermeddler has no interest whatever, and where the assistance rendered is without justification or excuse." Champerty, on the other hand, is characterized by "the receipt of a share of the proceeds of the litigation by the intermeddler." Some common law court decisions, however, add a second factor in determining champertous contracts, namely, that the lawyer must also, "at his own expense maintain, and take all the risks of, the litigation."

The doctrines of champerty and maintenance were created in response "to medieval practice of assigning doubtful or fraudulent claims to persons of wealth and influence in the expectation that such individuals would enjoy greater success in prosecuting those claims in court, in exchange for which they would receive an entitlement to the spoils of the litigation.""In order to safeguard the administration of justice, instances of champerty and maintenance were made subject to criminal and tortuous liability and a common law rule was developed, striking down champertous agreements and contracts of maintenance as being unenforceable on the grounds of public policy."

In this jurisdiction, we maintain the rules on champerty, as adopted from American decisions, for public policy considerations. As matters currently stand, any agreement by a lawyer to "conduct the litigation in his own account, to pay the expenses thereof or to save his client therefrom and to receive as his fee a portion of the proceeds of the judgment is obnoxious to the law." (G.R. No. 173188. January 15, 2014)

The rule of the profession that forbids a lawyer from contracting with his client for part of the thing in litigation in exchange for conducting the case at the lawyer’s expense is designed to prevent the lawyer from acquiring an interest between him and his client. To permit these arrangements is to enable the lawyer to "acquire additional stake in the outcome of the action which might lead him to consider his own recovery rather than that of his client or to accept a settlement which might take care of his interest in the verdict to the sacrifice of that of his client in violation of his duty of undivided fidelity to his client’s cause."

Rule 2.03 of the CPR provides:

RULE 2.03. A lawyer shall not do or permit to be done any act designed primarily to solicit legal business.

Hence, lawyers are prohibited from soliciting cases for the purpose of gain, either personally or through paid agents or brokers. Such actuation constitutes malpractice, a ground for disbarment.

Rule 2.03 should be read in connection with Rule 1.03 of the CPR which provides:

RULE 1.03. A lawyer shall not, for any corrupt motive or interest, encourage any suit or proceeding or delay any man’s cause.

This rule proscribes "ambulance chasing" (the solicitation of almost any kind of legal business by an attorney, personally or through an agent in order to gain employment) as a measure to protect the community from barratry and champerty.

This rule proscribes "ambulance chasing" (the solicitation of almost any kind of legal business by an attorney, personally or through an agent in order to gain employment) as a measure to protect the community from barratry and champerty. (A.C. No. 6672. September 4, 2009)

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