A champertous arrangement is unlawful. The action was time barred. It was not an assignment of the cause of action. Such a claim by a liquidator will not be permitted to proceed. The court granted a stay in an action being funded pursuant to a champertous arrangement by the liquidator. He held that that, whether or not the expressions of opinion in Martell that, in a case of maintenance, a stay should not be ordered remained good law (see further below), there was no doubt that the court was free, in the case of a champertous agreement, to grant a stay on the basis that it constituted a continuing abuse of process which the court, as well as the defendants, had an interest in bringing to an end.
Lightman J said: ‘This ground ceases to have any force with the abolition of the crime of maintenance, and the recognition of so many grounds for a stay which do not constitute defences, e.g. absence of authority of the plaintiff’s solicitors, forum non conveniens or the fact that the action is brought for a collateral (improper) purpose.’
Judges:
Lightman J
Citations:
Independent 20-Sep-1994, Times 15-Aug-1994, [1995] Ch 80
Jurisdiction:
England and Wales
Citing:
Cited – Martell v Consett Iron Co Ltd ChD 1955
In a case of maintenance (as opposed to champerty), a stay should not be ordered. The laws relating to maintenance and champerty must develop to accommodate to changing times. . .
Cited by:
Cited – Abraham and Another v Thompson and Others ChD 12-May-1997
The court may issue a stay of proceedings pending disclosure of the source of funding of an action, without there needing to be any suggestion of champerty or other illegality. The first plaintiff was ordered to disclose to the 5th and 6th . .
Cited – Abraham and Another v Thompson and Another CA 24-Jul-1997
The plaintiffs appealed an order that they should disclose who if any had funded their case. The case concerned failed business ventures in Portugal. . .
Lists of cited by and citing cases may be incomplete.
Litigation Practice
Updated: 08 April 2022; Ref: scu.81063