A champertous assignment refers to the transfer of a legal claim, known as a chose in action, to another party with the primary intention of having that party pursue a lawsuit. Under traditional common law, the person receiving the assignment must not be involved in the original litigation; they must be an outsider to the dispute.
This term is commonly used in civil law contexts, particularly in cases involving personal injury, contract disputes, or property claims. Champertous assignments can be relevant when individuals or entities seek to finance litigation by selling their claims to third parties. Users may find legal templates on US Legal Forms that assist in drafting champertous assignments or related documents.
Here are a couple of examples of abatement:
(Hypothetical example) A person who has been injured in an accident may sell their right to sue the at-fault driver to a third-party investor. The investor, being a stranger to the original case, can then pursue the lawsuit on behalf of the injured party.
| State | Champertous Assignment Rules |
|---|---|
| California | Generally prohibits champertous assignments unless specific conditions are met. |
| New York | Allows champertous assignments but with strict requirements to prevent abuse. |
| Texas | Permits champertous assignments, provided the assignee is not involved in the original dispute. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Champertous Assignment | Transfer of a legal claim to a third party to pursue a lawsuit. | Involves an outsider to the original litigation. |
| Contingency Fee Agreement | An arrangement where a lawyer is paid a percentage of the settlement or judgment. | Involves legal representation rather than assignment of claims. |
If you are considering a champertous assignment, it is important to understand the legal implications involved. You may want to consult with a legal professional to ensure compliance with state laws. Additionally, explore US Legal Forms for templates that can help you draft the necessary documents.
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It is the transfer of a legal claim to a third party for the purpose of pursuing a lawsuit.