Andrew Stolper, Former Federal Prosecutor, Fends Off Critics of His Litigation-Finance Firm

Categories: Court, OC Media

Andrew-Stolper-300x200.jpg
Andrew Stolper eyes the foam running down the glass of the craft beer he just took a swig from at the SideDoor in Corona del Mar as he launches into an explanation of his noble experiment.

The former federal prosecutor and his ex-FBI agent business partner recently opened Crux Capital, a new Irvine litigation-finance firm.

What is litigation finance? Imagine you own a small company that was screwed royally by a large corporation. You want to go to court to right that wrong, but the cost may be prohibitive because the corporation has legal teams that, even if they can't beat you on the case's merits, they can drag the proceedings out for years to bleed you dry financially and make you go away worse off than when you started.

Litigation-finance firms, which are relatively new to the United States, can look at your case, judge its merits and invest in your legal team in exchange for a percentage of a jury award or financial settlement. Conceptually, Stolper tells me, litigation finance is an old idea that has been practiced with gusto the past 25 years in the United Kingdom and Australia. He believes it can help level the playing field in court and lead to more justice.

But the United States Chamber of Commerce is pushing back hard to stop litigation finance from flourishing here. Lisa Rickard, president of the U.S. Chamber's Institute for Legal Reform, tells the Weekly her office is calling for "commonsense safeguards to prevent third-party financing from undermining our justice system."

Interestingly, the U.S. Chamber routinely opposes government regulation of businesses, saying it should be up to industries to police themselves. But Rickard maintains that relying on the legal community to monitor litigation finance "will further turn our courthouses into cash machines while bogging down our legal system in a continuing flood of lawsuits."

us-chamber-of-commerce-logo.jpg
"Third-party litigation financing encourages merit-less lawsuits, since one windfall can subsidize many losses, and investors verify a lawsuit's 'jackpot' potential, not its legitimacy," Rickard says.

This is nothing Stolper has not heard before. But he finds it curious the U.S. Chamber, which is supposedly all about protecting small businesses, is essentially siding with big corporations who might've screwed over, say, a mom and pop shop.

"My clients are members of the U.S. Chamber of Commerce," Stolper notes. "My clients are not likely to be big businesses. They have their own lawyers. What does the U.S. Chamber have against smaller American businesses?"

Rickard counters that companies like Crux Capital will not help small businesses as advertised.

"At its core, third-party litigation financing is about making money off of the little guy," she claims, "not benefiting him or advancing justice."

Stolper calls it "fair criticism" to fret about more junk cases clogging our courts, but he adds the idea behind Crux Capital is not to generate more litigation only to help offset mounting legal costs.

Now that Crux Capital is up and running full-time, Stolper and partner Peter Norell are dealing less with critics than they are potential investors and hedge fund managers. Anyone can invest but that won't give you a vote in which cases Crux Capital gets behind, Stolper notes.

"They are betting on us to make the right calls"--or, to put it in baseball terms, those investments will reap dividends overall if Stolper and Norell "have one or two outs, five or six doubles and triples and one or two homers."

He is certain that Crux Capital will get behind--now we're switching from round ball to horse racing--the wrong thoroughbred in some situations. The success of his company, he says, will hinge on being right more often than being wrong.

Controversy is not new to Stolper, who left the U.S. Attorney's office in Santa Ana earlier this year.


My Voice Nation Help
1 comments
18usc241
18usc241 topcommenter

Much success to Crux Capital - and God bless the lawsuit mechanism - aka one of the main ways to hold people accountable for their actions in America. Attempting to reason with sociopaths is the world's most frustrating endeavor.

Now Trending

Anaheim Concert Tickets

From the Vault

 

Loading...