For many, the greatest obstacle to accessing justice is not the merits of their case, but the cost of initiating and pursuing it. Consequently, as litigation grows in complexity and expense, the question of how parties finance legal proceedings has become increasingly important. Globally, third-party litigation funding has emerged as a tool for the expansion of access to justice by allowing claimants to pursue strong claims that they may otherwise be unable to afford. Yet the development of litigation funding has long been at odds with the legal doctrine of champerty.

In Jamaica, where English common law principles apply, the relationship between champerty and litigation funding raises an important question: Does the doctrine render litigation funding unlawful, or is there room for the development of a regulated funding industry that will support access to justice?

Understanding Champerty and Litigation Funding

Champerty is a form of maintenance, originating in English law, which involves an unrelated third party assisting a litigant in pursuing a claim in exchange for a share of any recovery obtained. Historically, courts viewed such arrangements with suspicion, believing that they encouraged speculative litigation and opened doors for abuse of the legal process. The courts were particularly concerned about “officious intermeddlers” financing litigation for profit despite having no legitimate interest in the dispute, hence the doctrine traditionally being treated as unlawful and contrary to public policy.

Litigation funding, often referred to as “third-party funding”, involves a third-party providing financial support, which can be considerable in large commercial disputes, for legal proceedings in exchange for a portion of any successful recovery. Unlike contingency fee arrangements between lawyers and clients, litigation funders are typically independent investors with no pre-existing connection to the dispute. In most cases, they assume the risk of loss if the claim fails.

While litigation funding serves an important function of enabling judicial recourse, it inevitably raises concerns. This is because it involves the very type of third-party financial interest that the doctrine of champerty has historically sought to prevent.

The Changing Global Perspective

Many jurisdictions, in modernising their approach to champerty, no longer treat all champertous arrangements as automatically unlawful. Instead, courts have increasingly moved to examine whether a particular arrangement actually offends public policy or threatens the proper administration of justice.

Countries such as Canada, South Africa, and the United Kingdom have progressively adopted more permissive approaches to litigation funding, while simultaneously introducing safeguards to prevent abuse. Common protections include judicial oversight, requiring the disclosure of funding agreements and restrictions on funder control of litigation.

Other jurisdictions have gone as far as expressly recognising this permissive approach through legislation. Singapore’s Civil Law (Third-Party Funding) Regulations 2017 permits third-party funding in specific dispute resolution proceedings. Additionally, the Cayman Islands’ Private Funding of Legal Services Act 2020 directly authorises litigation funding agreements and abolishes common law prohibitions on maintenance and champerty.

The shift reflects a growing recognition that litigation funding can improve access to justice, particularly in complex and costly proceedings, provided appropriate protections are in place. It is noteworthy that acceptance of litigation funding has often emerged more swiftly in arbitration proceedings in comparison to litigation proceedings. This is likely attributable to arbitration’s private and consensual nature in contrast to champerty’s historical development as a doctrine to protect the integrity of public justice. Thus, jurisdictions such as Singapore initially confined statutory authorisation of third-party funding to international arbitration and related proceedings before extending the scope of permitted funding.

Jamaica’s Cautious but Progressive Approach

Champerty remains an important consideration for Jamaica, and the legal profession has customarily been wary of arrangements that resemble champertous agreements. The Canons of Professional Ethics, for example, prohibit attorneys from stirring up litigation and generally restrict them from acquiring interests in the subject matter of their clients’ disputes.

At the same time, though, Jamaica has shown a willingness to modernise aspects of the view on champerty, whereby access to justice considerations justify reform. A notable example is the Legal Profession (Contingency Fee) Regulations 2018, which permit attorneys to enter into regulated “no win, no fee” arrangements subject to statutory limits. While agreements that fall outside the regulatory framework may still rightfully be considered champertous and void, the legislation signals that financial participation in litigation outcomes is no longer viewed with the same level of hostility that historically existed.

Jamaican case law suggests that the courts have adopted a similarly nuanced approach. In Gresford Jones v Yvon Desulme et al (Supreme Court of Jamaica 5 November 2001, Suit No CL J 061 of 1999), the court recognised champerty as a doctrine which remains important, but is not automatically determinative. As a result, allegations of champerty were held unable to be decided summarily, but rather requiring a full hearing.

Similarly, in Jade Overseas Holdings Ltd V Palmyra Properties Ltd & Others [2014] JMCA Civ 9, the Court of Appeal rejected the notion that third-party litigation funding arrangements are automatically void for champerty. Instead, the court held that the proper approach is to examine the substance of the arrangement to determine whether it, in its operation and effect, contradicts public policy.

The judicial posture emerging from these authorities is evidently that champerty is no longer a rule of automatic prohibition, but a doctrine of scrutiny applied contextually.

Looking Ahead

Against this backdrop, a space may be created for litigation funding in Jamaica as it is not inherently unlawful. If it is to meaningfully develop, its future will depend less on doctrinal permission, but on a strong regulatory framework which addresses champerty concerns while enabling access to justice.

The structuring of a workable framework may be aided by the combination and adoption of other common law litigation funding practices, including legislation, judicial oversight via disclosure and court approvals, control safeguards, and limited funder recoveries to align with public policy. Taken together, these elements provide a pathway for litigation funding’s development rather than prohibition on the basis of champerty.

Currently, Litigation Funding occupies a transitional legal space in Jamaica — recognised in principle but awaiting structured regulation. The scheme ultimately being embraced is dependent on whether it can be shaped into a disciplined mechanism for access to justice. Otherwise, this potentially valuable tool risks reverting to the very mischief underlying champerty.

This article was written by Peter Goldson who is a Partner at Myers, Fletcher and Gordon and a member of the firm’s Commercial Department with the assistance of legal intern, Amanda Taylor. He may be contacted at peter.goldson@mfg.com.jm or through the firm’s website www.myersfletcher.com.

This article is for general information purposes only and does not constitute legal advice.