The ABA Journal reports that an Ohio court found money paid to litigants void as champerty and maintenance.
Champerty, says Dietl: Br Unterstützung einer Prozeßpartei (gegen Zusicherung eines Teils des Prozeßgewinns)
Maintenance: . unzulässige Unterstützung einer Prozeßpartei (od. beider) durch einen Außenstehenden (Am obs.)
British? American? Both are obsolete terms in both Britain and America, as far as I know.
Interim Settlement Funding Corp. is a law-loan company. It lent the defendant $6,000 in return for her later paying it $16,800 if the case was over within 12 months, and increasing amounts if it took longer.
She refused to pay – she paid back the $6,000 plus 8% interest. She then sued the companies, asking the court to find the contract void.A magistrate judge found the loans usurious, and this was confirmed by a trial court and by the Ohio Court of Appeals. The case finally went to the Ohio Supreme Court, where the champerty and maintenance decision was made.
The article is interesting because it reports the reactions of various lawyers to this curious decision.
Here is a nice diagram of the Ohio courts.
A related article about lawsuit funding at Findlaw.
Not quite the same topic, but in recent years Prozessfinanzierer (litigation financers) have appeared in Germany. Handakte WebLAWg reports on a case where it was held that the litigation financer FORIS had no right to organize settlement negotiations, as it was not a lawyer.