The Internet has improved life in so many ways from spam to Matt Drudge and now it may make it easier to get sued. By making long, expensive pre-trial negotiations easier, two new online services are looking to make out well themselves.
In online mediation, two parties submit offers to a computer system. If these are within a given range, the case settles for the average. If not, the parties repeat the process, edging closer each time. Neither side finds out the other's bids. "Even we don't see the numbers," says Richard Schnoll, a senior vice president at Cybersettle, the oldest player in the still-young field.
Cybersettle initially charges only the party that opens negotiations, but each party must pay a "success fee" of $200 if the case is resolved. ClickNSettle charges both parties for joining, and charges $10 to $20 for each bid.
ClickNSettle, which is a subsidiary of National Arbitration and Mediation Corporation, a large, publicly-traded mediation company, will offer you access to NAM's human arbitrators at a much steeper price if the system can't find common ground.
Cybersettle, on the other hand, is a pure Internet play. "Offline arbitration and mediation companies are more expensive and we don't believe that they're very successful," Shnoll says.
If these services catch on, it could become easier for small businesses to attempt legitimate lawsuits. Or it might provide an avenue for spurious claimants to run up false claims and see who salutes. Either way, the settlement services win.