Hornsby says lawyers leverage the threat of
litigation to get a settlement. If the insurer's lawyer refuses to
settle the case, MyClaim.com and Self Settle's customers lose any money
they've invested in the self-help legal services. They can either hire
lawyers or represent themselves in court — a risky prospect at best.
"It seems what the consumers risk is that they can be out more money
than if they went to the lawyer to start with," Hornsby says.
Hornsby also questions Yelich's claim that attorneys would offer a
reduction in fee for the legal work a consumer performed at
MyClaim.com. "If someone took a case like this to a lawyer, the lawyer
would have the obligation of reviewing and analyzing everything the
client had done," Hornsby explains.
On March 21, 2000, Mallen filed a lawsuit on behalf of all Illinois
personal-injury attorneys accusing MyClaim.com of engaging in
unauthorized practice of law and unfair competition. It seeks an
injuction to prevent MyClaim.com from conducting business in Illinois.
Mallen alleges MyClaim.com could mislead consumers, who are at risk of
losing their entire case. For example, he says MyClaim.com is not clear
about Illinois' statute of limitations. The time restrictions on filing
claims vary and depend on the circumstances in which the person was
injured. "There were very significant and false statements made [by
MyClaim.com]," Mallen says. "The problem here is that you can damage
people severely. All of the sudden, they've lost their claim because
they're relying on unauthorized, inaccurate information."
However, Reinholz, MyClaim.com's CEO, contends his company has not
crossed any legal or ethical lines in helping people prepare claims.
"When we went into this business, we knew, obviously, we would be
challenged. We spent a great deal of time and money ensuring that we
are not practicing law," he says. "We feel very confident that the
lawsuit in Illinois will either be dismissed on its merits or we will
defend [against] it successfully."
MyClaim also has been battling in court with a former consultant and insurance company
attorney, Barbara Gilbert of Irvine, Calif., alleging she breached
agreements. The company retained Gilbert to assist in developing its
settlement system, but Gilbert, who left in February, prior to the
expiration of her contract, claims she owned the company's intellectual
property and its Web site. A St. Louis Circuit Court judge issued a
court order preventing Gilbert from "making any personal use of any
confidential information concerning the business of MyClaim.com,"
according to MyClaim.com.
Gilbert says the MyClaim.com Web site is based on a legal self-help
book she wrote to educate non-lawyers about how to settle their own
personal injury cases. On May 1, she filed a suit in California's
Orange County Superior Court, alleging, among other things, that her
former employer committed fraud, conspiracy, and unlawful and unfair
business practices.
"My main goal is to get them to stop using the material I created,"
says Gilbert, who believes employees at MyClaim.com are not qualified
to be helping people settle claims.
Officials from MyClaim.com deny Gilbert's allegations. "They're all not
true and we can prove they're not true," Reinholz says. "We feel she
has breached both her consulting agreement and confidentiality
agreement. We'll continue to pursue remedies against her."
So far there's little competition for
MyClaim.com and Self Settle. Online negotiating sites are the most
similar businesses, but there are key differences. Online
dispute-resolution Web sites such as Cybersettle, clickNsettle, and
SettleOnline allow customers to submit offers and demands on their
claims electronically. The consumer and the insurer go through a number
of rounds in an attempt to reach an out-of-court settlement on an
insurance claim.
Russell says Self Settle could help people prepare for the online
negotiating sites. "They're the next logical step for our program," he
says.
But Yelich believes MyClaim.com offers a more valuable service than
even the dispute-resolution sites. "It's just an online way for them to
negotiate back and forth a number," Yelich says. "I know that's crudely
stated, but that's what they're doing." MyClaim.com, on the other hand,
allows customers to take a more active role in securing a fair claim,
he says. "This is a self-help, online Web site that provides tools and
resources to help injured people," Yelich says. "We believe [people]
will be more informed and empowered with this system." Back to page 1
