Champerty Law and Legal Definition

Champerty is the practice of agreeing to paticipate and share in the proceeds of a lawsuit, despite not being a proper party to the dispute. The outside party, usually an attorney, bargains to exchange their financing and promotion of the lawsuit in exchange for a share of the recovery.

Champerty is distinguished from barratry, which is the active encouragement of lawsuits. Champerty is prohibited in some jurisdictions; in others, judges are considered to have the responsibility for policing such behavior.