The debut of clickNsettle.com on June 23 comes about a year after the launch of a similar service, Cyber$ettle.com, based in New York City, and the new business has already caught the attention of Cyber$ettle's biggest insurance client, Travelers Property Casualty Corp. "It's the highest form of a compliment that someone would try to imitate us, so in that sense we're not surprised about this company being created," says Cyber$ettle chairman James Burchetta.

Not surprised, but not happy, either. As far as Burchetta is concerned, the companies are too close for comfort. "They basically just copied our method of doing business," he charges. "We have a patent pending that we filed in August 1998, so what they do is at their own risk."

Israel scoffs at that notion. "I would say if anyone will be mirroring the other, it will be Cyber$ettle mirroring us," he contends. "Many of things they claim they're going to do are already operational on our site, and it wouldn't surprise me if theirs looks surprisingly similar to ours once they learn how to program it. But it's posturing they must take from a competitive perspective because their business is disappearing."

Regardless of who's right, the companies do offer consumers nearly identical services in a nearly identical format.

Services offer many of the same features

Here's how they work: You log onto the company Web site and register your case after paying a $25 registration fee. (ClickNsettle allows defendants to file a "priority" case for $100 if you want it expedited.) The other party in the dispute is notified of the opportunity to resolve the case online. Both you and the other side then electronically enter the amount you wish to settle for, but neither side ever sees the other's offer. Under the clickNsettle system, once claimants enter their first settlement demand, they must pay an additional $50 "engagement" fee. Cyber$ettle, in contrast, charges only the insurance companies a $75 engagement fee, not the claimant.

Both companies give you three rounds to reach a settlement. If the offers come within 15 percent of each other, the case automatically settles. Cyber$ettle will also consider the case settled if the offers are within $5,000 of each other. ClickNsettle requires a $100 "settlement" fee for cases that settle for less than $10,000 and a $200 fee for higher settlements. Cyber$ettle charges each side an additional $200 regardless of the amount. Both companies automatically deduct the claimant's fee from the settlement.

If the case doesn't settle, the two sides can ask for a human mediator to step in. Cyber$ettle offers a company employee as mediator. ClickNsettle says it goes one better by having the case heard by a judge. "A major consideration for the company in the development of this program is security," says Israel of clickNsettle. "Individuals and employees of our company can't access any individual case information. Even the judges are independent contractors, not employees."

Database can help you weigh the value of your claim

In addition, both companies are creating a database of the disputes and settlements, a potentially valuable tool if you're trying to gauge how much your claim is worth. But insurance companies could also use it to determine how much — or how little — you'd likely settle for based on similar cases. While Cyber$ettle initially told Insure.com it would sell its database only to the insurance industry, it now says consumers will have free access to it out of fairness.

To gain access to clickNsettle's database, the consumer or insurance company must be willing to have their own case entered into the database — minus confidential information such as names. "If a consumer has a specific injury and he's curious to see what settlements are for that particular injury, he can use the database," Israel says. "But the cases really are unique, and all this information will give you is a reference point, such as the primary injury and the venue."

Need an attorney? You be the judge

One final difference: Cyber$ettle says its dispute-resolution service will make attorneys almost unnecessary to settle a claim online. ClickNsettle, on the other hand, recommends you use an attorney, just as you would in a normal court proceeding. "Consumers can use this without an attorney," Israel says. "But I wouldn't recommend it. A lot of people make assumptions without having all the facts. Remember the woman who had the coffee spilled on her at McDonalds? I literally have hundreds of people mention to me that they should have something spilled on them so they can collect millions of dollars. But it doesn't work that way, and attorneys know that."

Travelers Property Casualty Corp., Cyber$ettle's largest client, has already settled more than 60 cases through the site and gives it rave reviews. But it also wasted no time signing on with clickNsettle.com. Ray Lalo, assistant regional vice president for the New York region for Travelers, says his company doesn't have an exclusive contract and thus can use both resolution services. It is trying out clickNsettle.com regionally and has filed two cases so far.

Companies try to one-up each other

ClickNsettle.com anticipates handling upwards of 10,000 cases online annually, while Cyber$ettle puts its estimate at a whopping 300,000 cases a year — or more. "One thing there's no shortage of in the United States is lawsuits," notes Israel, who also predicts that most of his company's disputes will settle for more than $10,000.

Despite Cyber$ettle's huge claims-settlement projections, clickNsettle has no fear. "We really don't consider them competition," Israel says. "ClickNsettle carries with it the NAM logo. We're an established company. One of the hurdles Cyber$ettle is going to have to get over is that people don't know who they are. They're losing business to us."

As both companies scramble for the upperhand, it could be clients like Travelers that ultimately decide which will thrive. Or perhaps it will be the U.S. Patent Office. ClickNsettle has also filed for patents on its dispute-resolution software programs.

Cyber$ettle expects approval of its patent next summer. If that happens — and Burchetta has no doubt it will — he says no other company, including clickNsettle.com, will be allowed to use real-time, online dispute-resolution services. "I think clickNsettle must have looked at our Web site," he speculates. "We're so far ahead of anyone, including clickNsettle, in how we do this. They're at risk of violating our method of doing business when our patent is granted, and we will vigorously defend ourselves against anyone violating our patent."

Israel, however, is doubtful that Burchetta can patent a dispute-resolution process rather than specific software systems. "Cyber$ettle is under the illusion that they can buy that process," he says. "I'm confident I have a more accurate perspective on this than they do. But time will tell."