Each year, an average of 24,000 legal claims are filed against New York City. Settling those claims costs taxpayers approximately $600 million annually in payments.

New York City is the largest defendant in the city court system, and as a result, the city's legal calendars are traditionally backlogged, said Michael Aaronson, bureau chief of the New York City Comptroller's Bureau of Law and Adjustment.

"Because of our tremendous workload, the city has had a very bad reputation when it comes to dealing with these cases prior to entering the court system," he said. "So we've spent a lot of time trying to reverse that opinion, working with the judiciary to show we are serious about cutting back on anything entering the system."

Part of that effort was the implementation of an online claim settlement system called Cybersettle. New York City, which is self-insured for legal claims, is the first government entity in the world to embrace the new automated approach to negotiating claim settlements.

"I am a strong advocate of harnessing technology to improve services in government," said New York City Comptroller William C. Thompson Jr., noting that the online tool helped his office accelerate claims resolutions and reduce operational costs.

The Comptroller's Office said it expects Cybersettle to save taxpayers many millions of dollars annually as it goes into full use. Those savings, however, could be just the tip of the iceberg as Cybersettle becomes a routine part of the thousands of claims the city responds to each year.

Cybersettle saves the Comptroller's Office considerable time and energy that's usually taken up in correspondence, meetings and potential case litigation, said Michael Bott, assistant comptroller for information technology and CIO of the New York City Comptroller's Office.

"We definitely view Cybersettle as a vehicle to help reduce the amount of payments made, principally through avoiding litigation," Bott added. "The types of claims involved are things like slipping and falling on the sidewalk, injuries on city property, traffic devices and personal injury cases. There are around 9,000 such cases each year."

The Comptroller's Office already maintains a sophisticated in-house database called the Omnibus Automated Image Storage and Information System (OAISIS). The database holds all information regarding claims filed against the city, and also incorporates an imaging database so images of documents such as accident and police reports can be filed. It includes workflow capabilities, too.

"Processing a claim is a fairly automated process," explained Bott. "We already use OAISIS to route that claim to various representatives who are investigating and negotiating them, or who may be preparing for litigation."

Part of the current adoption of Cybersettle involves building direct interfaces between OAISIS and Cybersettle. "That way, it is really a one-click process to load up a claim into Cybersettle off our system," said Aaronson. "It is almost transparent to our adjusters. For us, because of our heavy volume, that is really key as it avoids a lot of the clerical tedium and mistakes that would happen, and it ensures both systems are in sync."

The Birth of Cybersettle

The original idea for Cybersettle was conceptualized in 1995, when Cybersettle CEO Charlie Brofman, then a practicing trial attorney, was in the process of settling an insurance claim that was negotiated to an unrealistic demand of $1 million. According to Brofman, both parties were aware of what the case was really worth -- far less.

"But we reached an impasse," he said. "We really couldn't talk to each other because I didn't want to tell him what I was willing to pay, and he didn't want to tell me what he was willing to take, which is the usual stuff that goes on. Attorneys don't want to disclose that because it weakens their negotiating hand."

Blake Harris  |  Contributing Editor