De Crittenden v Bayliss

An agreement under which a person is remunerated from the profits of litigation may raise a serious question of champerty even where that person previously had a legitimate interest in the litigation and incurred expenditure while the arrangement was lawful. The court must examine the continuing agreement as a whole. In doing so, it should consider the restrictions imposed on solicitors and other officers of the court when assessing the risks inherent in a similar arrangement made by a lay person. The broad guidance in Giles v Thompson requires further consideration in this context.

The claimant succeeded before His Honour Judge Nicholl in Birmingham County Court on an agreement sued upon by him. The defendant’s sole defence was that the agreement was champertous. The claimant and defendant had previously worked together in relation to litigation arising from business contacts, but their relationship later deteriorated. The renewed application concerned whether the continuing agreement, made after that deterioration, was arguably an arrangement for remuneration from litigation profits and whether the court had adequately considered the analogy with professional restrictions.

1. Permission granted. The application was a renewed application for permission to appeal from the claimant’s success in the Birmingham County Court. The merits of the champerty issue were not finally determined.
2. The county court judge had made findings of fact generally unfavourable to the defendant, and had directed himself by reference to the broad principle in Giles v Thompson. Those findings had not been challenged.
3. Nevertheless, it was arguable that, viewed in the circumstances of the continuing agreement after the parties had fallen out, the arrangement was simply one for the claimant to be remunerated out of the profits of litigation. It was unclear whether such an arrangement could be accommodated within the law of champerty, regardless of its bona fides or general propriety. The extent to which the guidance in Giles v Thompson applied required further consideration.
4. The claimant’s work was of a kind normally performed by a solicitor. This did not make the agreement necessarily objectionable, but the court should have closely in mind the restrictions imposed on solicitors and other officers of the court when assessing the dangers of a comparable agreement made by a lay person.
5. The grounds of appeal were to be reconsidered and, if advised, re-served within 28 days in a narrower form. The order was: application allowed, with legal aid taxation of the applicant’s costs.

• Court of Appeal (Civil Division): On a renewed application, permission to appeal was granted. The grounds were permitted to be reconsidered and re-served within 28 days.
• Birmingham County Court: His Honour Judge Nicholl had found for the claimant on an agreement challenged solely as champertous.