England and Wales
In England and Wales, statutory amendments in the late 1960s abolished the torts and crimes of maintenance and champerty. Maintenance refers to an unconnected third-party assisting to maintain litigation by providing, for example, financial assistance. Champerty is a form of maintenance where a third-party pays some or all of the litigation costs in return for a share of the proceeds. (We explored the history and development of these doctrines in issue 7 of our International arbitration report.)
Common law prohibitions on maintenance and champerty do still remain and such arrangements would be contrary to public policy and unenforceable as a result. The courts have, however, played a significant role in developing (i.e. relaxing) the rules on champerty and maintenance, particularly in respect of third-party funding.
In England and Wales, a third-party funding arrangement will generally only amount to maintenance or champerty where there is an element of impropriety such as disproportionate profit or excessive control of the proceedings on the part of the third-party funder. The English courts have gone further; actively promoting the important role third-party funding can play in providing access to justice and downplaying historic concerns over such funding, such as the risk of justice being corrupted and/or inappropriate thirdparty meddling in proceedings.
Australia and the United States
In other common law jurisdictions such as Australia and many states in the US, the approach of the courts to maintenance and champerty is similar to that in England and Wales and the judiciary tends to be supportive of thirdparty funding.
The courts in Australia (one of the most developed third-party funding markets) are more permissive than in England, finding that there is no public policy objection to a third-party funder not only financing but also controlling the proceedings with the aim of profiting from them.
In the US, where the third-party funding market is newer, the approach varies from state to state. In many states, in the absence of formal regulation, the courts have taken an active role assessing the validity and enforceability of third-party funding agreements. As in England, the common law doctrines of maintenance and champerty historically have formed the basis of challenges to such agreements. But there does seem to be a trend towards limiting the scope of those doctrines, with many states either abolishing them or dismissing them as not relevant to third-party funding agreements. There are a few states, however, where third-party funding agreements are considered to violate prohibitions on maintenance and champerty. In some of those jurisdictions, regulation (as opposed to prohibition) of third-party funders has been introduced.
The Irish approach, however, is quite different. In Ireland, maintenance and champerty remain criminal offences. In May 2017, in Persona Digital Telephony Limited & Sigma Wireless Networks Limited v The Minister for Public Enterprise, Ireland and the Attorney General,  IESC 27, the issue of whether third-party funding arrangements amount to maintenance and champerty came before the Supreme Court of Ireland. The court held that an agreement by a professional third-party funder to fund a plaintiff’s case was champertous “as described in case law by the High Court and this Court over the last four decades” and therefore was not permitted. In coming to its decision, the court noted that “[c]hamperty remains the law in the State”, however, it stated that modernizing Irish law on champerty and third-party funding was not for the courts but was instead better suited for a “full legislative analysis”.
Legal commentators have since noted that this decision leaves Ireland lagging behind other common law jurisdictions. It remains to be seen whether Ireland will follow the example of Hong Kong and Singapore, to legislate to permit third-party funding.