The claim initially arose out of a products liability dispute and the parties chose to use Cybersettle in an attempt to speed up the process. The attorney representing the insurance carrier submitted three rounds of blind offers on-line through the Cybersettle system.
The opposing counsel "engaged" the case on the same day, by submitting three confidential demands, but the parties were initially unsuccessful. The case was resubmitted twice the following day and on the third attempt, it settled, less than 24 hours from its original submission.
Charles Brofman, Cybersettle President and CEO said:
"The savings potential for parties on large disputes is staggering. Companies are spending thousands of dollars daily keeping multi-million dollar cases open. Settling even a small percentage of these would yield discernible results."
Cybersettle is among a growing number of on-line dispute resolution companies, offering customers, usually insurance companies, claims administrators and lawyers, the opportunity to settle disputes more quickly and with less cost than the court system.
In Cybersettle's case a claim is initiated when someone, usually a claims professional, submits three offers, which will be used in the three separate rounds of the mediation. These represent a scale of maximum figures at which the insurance company will settle in each round of blind-bidding.
When the opposing lawyer is notified of the claim submission, he is then able to submit three claims demands on behalf of his client. These represent the minimum amounts for which the client will settle in any round.
The first round offer and demand are then compared, then the second, and then the third. If in any round the offer is higher than the demand, Cybersettle will calculate the mid point between the two, and that becomes the settlement figure.
On-line dispute resolution will not suit everybody, and is geared more towards a standard type of case, such as insurance disputes, where the question at issue relates to the payment of money – and how much – rather than a more complicated matter, such as the performance of a specific obligation.
In these types of cases lawyers need more control over the process than is provided by a double-blind bidding system.
"Any kind of alternative dispute resolution should be encouraged," said John MacKenzie, Senior Associate at Masons, the law firm behind OUT-LAW.COM. "But complex claims will often require advice across a range of issues, and will not be suited to a simple blind auction. Even in the more standard cases, lawyers will need to advise their clients on the tactical issues, such as where to start the bidding."