Champerty and maintenance are historic legal doctrines that address improper involvement in another person’s litigation. Maintenance refers to supporting or funding litigation in which the funder has no legitimate interest, while champerty is a more specific form of maintenance where the funder has an agreement to receive a portion of the proceeds of the litigation.

Although these doctrines were established a long time ago to prevent abuses of the legal system, they continue to be important in modern UK law, especially since litigation funding has become an essential means for parties to pursue claims. The law must strike a balance between ensuring access to justice and addressing concerns that financial incentives could promote unnecessary or abusive litigation.

This guide explores the origins and development of champerty and maintenance, how these concepts apply today, and their significance for modern litigation funding. It also considers the wider public policy issues businesses and litigants should understand when entering funding arrangements.

Definitions: What Are Champerty and Maintenance?

Maintenance is the act of providing support or funding for someone else’s legal case, where the supporter lacks a sufficient legal interest or other valid reason to be involved in the dispute. In simpler terms, it involves a third party assisting with litigation despite having no proper connection to the claim. This assistance can take the form of financial support or other practical help.

Champerty is a specific type of maintenance. It arises when an individual funds another party’s legal action in exchange for a portion of the proceeds or benefits gained from the claim. The defining characteristic here is the funder’s financial stake in the outcome. For instance, if a third party covers a claimant’s legal expenses in return for a predetermined percentage of any damages awarded, this could raise issues of champerty.

The difference between the two concepts is relatively straightforward: maintenance concerns inappropriate support for someone else’s legal action, while champerty involves that support along with an agreement to share in the results. Champerty is consequently a more specific form of maintenance.

Historically, both doctrines were viewed as problematic because they were thought to create opportunities for third parties to interfere in disputes for their own benefit.

Historical Background and Rationale

The historical roots of maintenance and champerty can be traced back to medieval England, a time when the legal system operated quite differently than it does now. During this period, litigation could be swayed by affluent and influential individuals who had the means and connections to meddle in disputes where they had no rightful stake. Maintenance rules emerged partly due to concerns that such outsiders could back one party against another, potentially leveraging their wealth or influence to skew the results of legal proceedings. Champerty was seen as a particularly troubling form of this conduct, where an outsider would support a claim in exchange for a portion of any potential recovery.

The underlying rationale behind these rules was to safeguard the integrity and independence of the legal process. The law sought to ensure that court cases were pursued by parties genuinely interested in resolving their disputes, rather than being exploited by outsiders seeking to promote weak or unnecessary claims, prolong litigation or exert influence or gain financially. These doctrines emerged partly as protective measures against such exploitation, upholding the idea that litigation should not serve as a profit-making venture for those without a legitimate stake in the dispute. These doctrines also helped guard against claims being brought or prolonged where there was little genuine merit.

However, over time, the rigid stance on maintenance and champerty began to change. As society, the legal profession and access to justice developed, courts became less concerned with outside involvement where there was a legitimate purpose behind it. Modern law therefore focuses more closely on the effect of an arrangement and whether it undermined the administration of justice, rather than treating every form of litigation support as unacceptable.

This historical development is important to understanding why these doctrines still matter today, particularly in the context of modern litigation funding.

Modern Legal Status of Champerty and Maintenance in the UK

The legal position on champerty and maintenance has changed considerably over the years. In England and Wales, the Criminal Law Act 1967 abolished maintenance and champerty as common law offences and removed tort liability for actions classified as maintenance or champerty. This reflected the changing role of third-party support within the legal system, including the growing use of mechanisms such as legal aid and insurance.

Nevertheless, the 1967 Act did not remove all of the underlying principles. Section 14(2) expressly preserved the rules that allow a contract to be deemed contrary to public policy or otherwise unlawful. As a result, while champerty and maintenance are no longer considered crimes in England and Wales, they can still influence the enforceability of certain litigation funding agreements.

The modern approach focuses less on applying the historical doctrines as rigid rules and more on whether a specific arrangement undermines the proper administration of justice.  At the same time, courts recognise that legitimate litigation funding can promote access to justice, especially for parties unable to afford to pursue a valid claim.

This balance is especially crucial in today’s context. A funding agreement is therefore not automatically deemed unenforceable just because a funder has a financial interest in the result. Instead, courts examine the nature and implications of the arrangement as a whole, including whether it creates a risk of improper interference with the litigation.

Impact on Litigation Funding

Champerty continues to be important in modern litigation because third-party funding has become an established way of allowing individuals and businesses to pursue claims they may otherwise be unable to afford. A litigation funder usually covers some or all of a claimant’s legal expenses in exchange for a predetermined financial return if the claim is successful. This situation can create a tension between making litigation accessible and ensuring that commercial interests do not improperly influence the proceedings.

The courts therefore examine the details of the funding arrangement and its possible impact on the litigation, rather than treating third-party funding automatically unlawful on the grounds of champerty.

Important factors that they consider include:

• the level of control the funder has over the proceedings,
• whether the claimant and their legal representatives maintain genuine control,
• if the funder’s return is proportional to the risk taken, and
• whether the arrangement poses a risk of fostering abusive or speculative claims.

This approach can be seen in Arkin v Borchard Lines Ltd where the Court of Appeal considered a professional funder that had invested around £1.3 million to support a claim in exchange for a share of any damages awarded. Although the claim failed, the court did not regard the funding arrangement as against public policy. This ruling highlighted that commercial litigation funding can have a legitimate role in supporting access to justice.

The key message for businesses is that third-party funding is not inherently unlawful. The important question is how the particular arrangement is structured and whether it allows the funder’s financial interests to interfere improperly with the litigation.

Exceptions and Lawful Arrangements

Although champerty and maintenance continue to have an influence on the law surrounding litigation funding, not all forms of third-party support are unlawful. Over time, the courts have recognised valid arrangements where financial support fulfils a genuine purpose and does not compromise the administration of justice.

An important example of legal financing agreements is conditional fee agreements (CFAs), under which lawyers may agree to receive some or all of their fees only if the case succeeds. CFAs are now a recognised method of funding litigation, subject to statutory and regulatory requirements. Similarly, after-the-event (ATE) insurance allows a party to insure against certain litigation costs after a dispute has arisen. These arrangements can support access to justice without necessarily amounting to improper maintenance or champerty.

Another recognised situation concerns the assignment of claims in insolvency proceedings. Insolvency practitioners may assign or sell certain claims to third parties, allowing them to be pursued where the insolvent estate lacks the resources to do so. Such arrangements can be legitimate, particularly where they serve the interests of creditors rather than encouraging speculative litigation.

The key issue is therefore not simply whether a third party has provided financial support, but why and how that support is provided. Courts will be concerned by arrangements that could encourage weak claims, give funders excessive control, or otherwise interfere with the proper administration of justice. Public policy remains an important safeguard, allowing courts to distinguish legitimate funding from arrangements that could constitute an abuse of process.

For businesses, careful structuring and appropriate supervision of funding arrangements remain essential.

Recent Developments and Case Law on Champerty and Maintenance

Recent cases and proposed reforms show that the law on litigation funding is still developing. A key case is PACCAR Inc v Competition Appeal Tribunal, in which the Supreme Court decided that some litigation funding agreements, where the funder’s payment was calculated as a percentage of the damages recovered, could be treated as damages-based agreements (DBAs). If the agreements did not meet the legal requirements for DBAs, they could be unenforceable. This created uncertainty for funders and parties relying on litigation finance.

The decision also led to calls for changes to the law. In 2025, the Civil Justice Council (CJC) published a review of litigation funding. It recommended reversing the effect of PACCAR and introducing a proportionate regulatory framework for the industry. The aim was to provide greater certainty while ensuring that funding arrangements remain fair and do not create opportunities for abuse.

The Government has indicated that it intends to address the impact of PACCAR through legislation, although the reforms have not yet been fully implemented. This means the legal position remains subject to further developments.

These developments show the balance that courts and policymakers are trying to achieve. Litigation funding can enable claims that might otherwise never reach court, but appropriate safeguards are needed to protect claimants and prevent funding arrangements from distorting the litigation process.

For businesses, the practical lesson is that litigation funding should be reviewed carefully against the current legal and regulatory position, particularly as further reforms are considered.

Practical Takeaways for Lawyers, Funders and Litigants

For lawyers, funders and litigants, careful planning is essential when entering into litigation funding arrangements. Parties should establish clear terms from the outset. The agreement should clearly set out the funder’s role, financial return, responsibilities and limits on its involvement. It should also comply with the relevant statutory requirements and professional obligations.

A key red flag is excessive funder control. The claimant should retain meaningful control over important decisions, including the conduct and settlement of the litigation. Arrangements may also attract scrutiny where the funder’s return appears disproportionate to the risk it has taken, particularly if this could place the claimant’s interests second to the funder’s financial interests.

Lawyers should carry out appropriate due diligence before recommending or entering into a funding arrangement. This includes checking the terms of the agreement, identifying potential conflicts of interest and ensuring that the client understands the financial consequences of the arrangement. Funders should similarly assess the merits and risks of a claim rather than creating incentives for unnecessary or speculative litigation.

Finally, all parties should keep funding arrangements under review as the law develops. Compliance with regulatory, statutory and professional standards is particularly important given the continuing changes following PACCAR.

A properly documented and transparent agreement can reduce uncertainty and help ensure that funding supports a legitimate claim without compromising the interests of the claimant or the proper conduct of the proceedings.

Looking Ahead

Champerty and maintenance have their roots in a very different legal system, where the involvement of powerful outsiders in litigation could threaten the fairness and independence of the courts. Although their traditional role has significantly diminished, the underlying principles behind them continue to influence how courts approach litigation funding and other arrangements involving third-party interests.

Today, legitimate funding can play an important role in improving access to justice, particularly where parties cannot afford to pursue a claim themselves. However, arrangements must be carefully structured to avoid excessive funder control, unfair financial terms or interference with the proper conduct of proceedings.

For businesses, litigants, lawyers and funders, the key lesson is that third-party funding is a legitimate part of modern litigation, but its terms matter. As the legal and regulatory framework continues to develop, obtaining specialist legal advice can help parties understand their options and ensure that funding arrangements comply with current requirements.

If you are considering third-party litigation funding or would like advice on an existing funding arrangement, Witan Solicitors can help. Our Commercial Litigation and Personal Litigation teams can advise on the legal and practical issues arising from litigation funding, assess potential risks and structure arrangements with confidence.

Contact us today on 0300 303 2071 or fill in our contact form to discuss how we can assist with your litigation funding requirements.

Last reviewed: by Qarrar Somji, September 2026