What is a Champertous Contract?

An agreement by a lawyer to conduct the litigation on his own account, to pay the expenses thereof or to save his client therefrom and to receive as his fee a portion of the proceeds of a judgment is obnoxious to the law. Such agreement is known as champertry.

Although a lawyer may in good faith advance the expenses of litigation, the same should be subject to reimbursement otherwise it would be contrary to public policy, especially if the lawyer has agreed to carry on the action at his expense in consideration of some bargain to have a part of the thing in dispute. Such agreement violates the fiduciary relationship between the lawyer and his client and renders the lawyer liable for administrative sanction. (Agpalo, Legal and Judicial Ethics, p. 392)