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A Primer on Champerty and Lawsuit Funding – and Impact on Insurers – Is Part of Report On U.S. Chamber’s Support for Federal Rule Change

What’s champerty?  How does it relate to litigation funding? And why should it matter to the insurance industry?

These are a few questions addressed this month in a short but pithy piece in the National Law Review, “U.S. Chamber Seeks New Federal Rule Requiring Disclosure Of Third-Party Litigation Funding Arrangements” (available here).

As for the answers: (1) champerty is “an agreement between an officious intermeddler in a lawsuit and a litigation by which the intermeddler helps pursue the litigant’s claim as consideration for receiving” a portion of the lawsuit proceeds, according to Black’s Law Dictionary (as cited in the article); (2) litigation funders are the “officious intermeddlers”, in the view of the U.S. Chamber of Commerce, which, according to the article, recently wrote to the Administrative Office of the U.S. Courts in favor of a revision to the Federal Rules of Civil Procedure that would require disclosure of all third-party litigation funding agreements in any federal lawsuit; and (3) “The insurance industry should keep a keen eye on these developments, as readily available litigation war chests will undoubtedly mean more litigation” (again, according to the National Law Review article).

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