The Westchester County-based company Cybersettle has settled nearly 200,000 claims online since its inception nearly 10 years ago.
And after handling personal injury claims filed against New York City on a demonstration basis, the company has now signed on to handle all of the city”™s 24,000 new claims as well as backlog litigation, said Cybersettle CEO Charles Brofman.
“We will handle all of the city of New York”™s disputes,” he said.
According to the New York City comptroller”™s office, Cybersettle helped save the city more than $11 million that would have been spent in legal fees fighting claims in court during the first year of the demonstration in 2004.
Brofman and a partner, James Burchetta, both trial attorneys, filed a patent for their online, double blind auction model.
Both men had experience representing opposite sides of claim disputes in court, and realized after a court case they were both involved in that it is often quicker and cheaper to settle claims if each side submits a confidential figure of how much they think the claim can be settled for. Oftentimes, each side submits near identical amounts, Brofman said.
“We are the only legal provider of this software in the states,” he said. “We”™ve handled over 180,000 claims and $1.2 billion worth of settlements.”
The company began doing personal injury claims, and later expanded to other areas, such as property damage, small claims and consumer-to-consumer disputes.
“We made a decision to move into other areas,” said Brofman. “We wanted to raise capital to develop and expand to new lines of business.”
That”™s when The Tri-State Private Investors Network, an organization of private, angel investors, swooped in.
The investor network became aware of the opportunity to invest in Cybersettle through its executive sponsorship of Private Equity Forums, an upscale venture capital conference held at the Yale Club three times a year, said Tri-State executive director Ellen Sandles.
“One of our members, Spencer Trask, an early stage venture capital fund, was presenting this portfolio company, Cybersettle, at Private Equity Forums and worked with us afterwards to arrange a private, confidential meeting for other investors who might be interested in the opportunity,” she said.
Sandles said investors were impressed at the initial traction Cybersettle had made, and saw great potential for growth in the company.
It”™s an intriguing concept to enable legal negotiations to be settled online, instead of court,” she said. “(Brofman) was very impressive as an entrepreneur.”
The Tri-State Private Investor Network was formed in 2000, when Sandles and several other individual private investors from New York, New Jersey and Connecticut decided to form the group.
The organization generally invests in one to three companies per year, but has already put money into four companies the past year, including Cybersettle.
Brofman confirmed the investment into his company was in the millions, but declined to cite a specific number.
Cybersettle currently does business throughout the United States, Canada and the United Kingdom, and has plans for further expansion around the world.
The company has 30 employees, and is headquartered in White Plains.
Brofman himself is a longtime Westchester County resident, and has lived in Waccabuc since 1996. He plans on keeping the company headquartered in the county for the foreseeable future.
“We are Westchester based, we employ Westchester people, we are squarely a Westchester company,” said Brofman.
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