Cybersettle and the Value of Online Dispute Resolution

For more than a decade, online dispute resolution has hovered above the legal and DR communities, posing both a threat to human DR professionals and the promise of radically more efficient dispute resolution systems. Cybersettle has been the tangible tip of the otherwise evanescent ODR spear—a success story of online dispute resolution playing a role in resolving old-fashioned legal claims. Cybersettle offers a double-blind bidding process in which parties submit three different settlement figures, and the program then tells them when a settlement range exists. An article from earlier this year in the Connecticut Law Tribune documented its growing profits and the agita it is creating in the flesh & blood bar.

Cybersettle’s main client is the City of New York, which uses the service to help resolve the waves of personal injury claims that wash over the City each year. The City reports impressive statistics about how Cybersettle has helped reduce the backlog of claims.

I recently cornered a plaintiffs’ attorney who handles many claims against the City and asked him about Cybersettle. He loves the service, but not necessarily for the reasons ODR champions might give. Cybersettle works, according to this attorney, because it gives cover to the City’s claims adjusters to accept settlement amounts. It doesn’t replace the human negotiations at all. The plaintiff’s attorney and adjuster negotiate a reasonable settlement figure and then put that into the Cybersettle program. It spits back exactly what they put in, and the adjuster can use that to defend himself if he is ever questioned about why he agreed to a settlement. The service is used only for small claims—nothing above five figures.

So what effect does Cybersettle have on the human players in the system? It doesn’t seem to be costing them business. Cybersettle may actually increase the number of claims filed. My plaintiff’s attorney told me is now more willing to take smaller claims than before the City began using Cybersettle, because claims are being resolved more quickly and with less litigation. So even if it reduces the number of hours spent litigating individual cases, there is little evidence that it will reduce the total demand for attorney time.

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