Maintenance and Champerty in India: Meaning, Difference, History and Legal Position
Introduction
Champerty and maintenance are old legal ideas from English common law. They deal with situations where someone improperly helps or finances another person’s lawsuit. The main goal was to stop outsiders from interfering in cases that did not concern them and to prevent people from using court cases for profit, harassment, or speculation.
Maintenance
Maintenance means giving improper support, encouragement, or money to someone who is fighting a court case when the person giving the help has no real connection to the dispute.
In simple words: If an outsider helps someone with a lawsuit without a proper reason, it can be called maintenance.
Example
A has no link to a fight between B and C. Still, A pays for B’s case just to help B trouble C. This can be maintenance.
Why the Rule Existed
The old rule against maintenance aimed to stop:
- Outsiders interfering in court cases
- Useless or harassing lawsuits
- Misuse of the court system
- Funding cases for wrong reasons
- Powerful people influencing justice unfairly
Champerty
Champerty is a special type of maintenance.
It happens when a person supports a lawsuit and agrees to take a share of the money or property that is won.
Simple Difference
- Maintenance = Improper help in someone else’s case
- Champerty = Improper help plus an agreement to share the winnings
Example
A agrees to pay for B’s case against C. In return, A will get 40% of whatever B wins. This can be champerty (where the law still treats it as wrong).
Difference Between Maintenance and Champerty
| Maintenance | Champerty |
|---|---|
| Improper help or support in another person’s case | A type of maintenance where the helper also gets a share of the result |
| The helper does not need to get any share. | The helper usually expects a share of the money or property won. |
| Wider idea | Narrower and more specific |
| Main worry: improper interference | Extra worry: making money from the result of the case |
Every champerty includes maintenance, but not every case of maintenance is champerty.
Historical Background
These rules started in mediaeval England. At that time, rich and powerful people sometimes funded lawsuits to gain property or control outcomes. The law tried to stop strangers from getting involved just because they hoped to profit.
Over time, these strict rules were relaxed as legal systems modernised.
Position in India
India does not follow the old English rules strictly.
Just giving money to help someone fight a case does not automatically make the agreement illegal. Indian courts usually allow such agreements if they are fair, honest, and not against public policy.
A famous case is Ram Coomar Coondoo v. Chunder Canto Mookerjee (1876). The Privy Council said that English rules on maintenance and champerty should not be applied in the same rigid way in India.
When Champertous Agreements Are Allowed in India
An agreement to fund a case can be valid if:
- It is made in good faith
- There is a proper contract
- The terms are fair and reasonable
- It does not encourage useless or harassing cases
- It is not oppressive or extremely one-sided
- It does not break any law or public policy
Courts look at the real facts and fairness of the deal, not just the label “champerty”.
Unfair or Oppressive Agreements
Even though champerty is not automatically illegal in India, courts can refuse to enforce an agreement if it is clearly unfair.
Example
A funds B’s genuine case but demands 90% of the property won, leaving B with only 10%. A court may decide this is too one-sided and refuse to enforce it.
Courts may look at:
- How rich or poor the parties are
- How much money was given
- The risk taken by the funder
- How big a share is demanded
- The circumstances of the agreement
- Whether it encourages speculative cases
Access to Justice
Court cases can be very expensive. Sometimes a person with a genuine claim cannot afford to fight it. Reasonable financial help can help such people get justice.
So, the law tries to distinguish between:
- Legitimate litigation funding (helpful and fair)
- Improper interference or speculation (harmful)
Lawyers and Litigation Funding
Different rules apply to lawyers.
Professional ethics usually stop advocates from having a personal financial stake in the result of a case. A lawyer’s main duty is to the court and to the client, not to personal profit from the outcome.
Third-party funding is different from a lawyer personally funding a case in return for a share.
Contingency Arrangements
A contingency arrangement means payment depends on the result of the case.
These are not automatically the same as champerty. Their validity depends on the law, the parties, and the terms of the agreement.
In India, special restrictions apply when advocates make fee agreements that depend on the result of the case.
Are They Still Torts?
In old English law, maintenance and champerty were treated as civil wrongs (and sometimes crimes).
In modern Indian law, they are mainly looked at through contract law, public policy, professional ethics, and the idea of abuse of process — not as automatic torts.
Simple Illustration
A has a genuine property dispute with B.
- C has no interest but only encourages A to sue B → This may raise issues of maintenance if the support is improper.
- C funds A’s case and will get 30% of the property recovered → This is an example of champerty.
- C gives reasonable financial help under a fair and legal agreement, without taking unfair advantage → This can be legitimate litigation funding.
Case Laws
In Indian jurisprudence, the strict English common-law doctrines prohibiting maintenance and champerty do not strictly apply; third-party litigation funding agreements are generally valid and enforceable if they are fair, reasonable, and made in good faith. Beginning with the landmark Privy Council decision in Ram Coomar Coondoo v. Chunder Canto Mookerjee (1876), Indian courts established that financing litigation in exchange for a share of recovered property is not inherently illegal, provided the terms are not unconscionable, extortionate, or aimed at speculative “gambling in litigation”.
This principle was reaffirmed in Lala Ram Sarup v. Court of Wards (1940), emphasising that such contracts must be judged on their fairness and risk allocation. Furthermore, while the Supreme Court in In Re: ‘G’, A Senior Advocate (1954) barred advocates from entering champertous fee arrangements due to professional ethics, it maintained that non-lawyers face no such bar—a position fully solidified in Bar Council of India v. A.K. Balaji (2018), which confirmed the legality of legitimate third-party litigation funding by non-advocates in India.
Conclusion
Maintenance means improper support of another person’s lawsuit.
Champerty is a form of maintenance where the supporter also gets a share of the winnings.
The old rules tried to stop people from turning court cases into tools for profit or harassment. In India, a champertous agreement is not automatically illegal. Courts check whether the deal is fair, reasonable, and consistent with public policy.
Modern Principle in Simple Words
Helping someone get justice is different from improperly interfering in or making money from someone else’s court case.
