Posturing: The Hidden Barrier to Optimal Settlements
Posturing is an ingrained behavior that permeates our daily lives. From haggling over car prices to negotiating home sales, we instinctively adopt posturing tactics to gain an advantage in negotiations. This same behavior extends to the realm of disputed claim settlements, where plaintiff lawyers typically demand inflated sums and insurers counter with unrealistic offers. This pervasive posturing, while intended to improve negotiation outcomes, almost always leads to protracted and costly delays in reaching an agreement.
The true cost of this posturing behavior is staggering. The national cost of delay in resolving litigated claims alone exceeds $135 billion annually. As parties engage in posturing rituals, legal expenses spiral upward, while the potential for a mutually beneficial settlement remains hidden beneath layers of artificial negotiation positions.
To illustrate this, consider a hypothetical scenario: A claimant demands $500,000, though she would be willing to accept $200,000. Meanwhile, the insurance company, while willing to pay $225,000, counters with a $20,000 offer. Both sides then agree that they are too far apart and spend the next several years engaged in expensive litigation. In this instance, despite the overlap in the parties' true settlement positions, the entrenched posturing on both sides prevented the discovery of that optimal settlement window.
To solve this problem, StreamSettle eliminates the incentive to posture by detecting any overlap in the negotiating parties’ settlement positions without being able to reveal or see the actual values submitted. For our users, the process is simple: insurers submit their highest offer and plaintiff lawyers submit their bottom-line demand into the StreamSettle interface. Due to StreamSettle’s cutting edge encryption protocols, it is impossible for anyone, including StreamSettle, to see the actual values submitted by users. But StreamSettle can detect if the submitted values overlap. And if there is overlap, a binding settlement is automatically reached at the midpoint of the overlapping values. As a result, the settlement amount is always at least as much as the demand and never more than the offer.
If the values do not overlap, no information about the submitted values is revealed, ensuring that the parties have nothing to fear in entering their true settlement positions.
WHAT YOU GET
We are seeking those employed in the claims resolution industry (e.g. insurance executives, claims analysts, personal injury and civil litigation attorneys, etc.) to help us shape and refine StreamSettle's features before we launch to the wider market.
All approved StreamSettle Beta Testers will be eligible for a discount on platform fees.
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Currently StreamSettle is only being offered to people in the claims industry (i.e. attorneys and insurance specialists).
StreamSettle securely and confidentially compares settlement positions of negotiating parties to determine if there is an overlap in the positions. If there is an overlap, the case is settled and the parties are provided with settlement documents. If there is no overlap, the parties are encouraged to submit new positions.
No. StreamSettle can detect if the encrypted submissions overlap, but it cannot measure any gap between them. Our encryption protocol prevents StreamSettle from knowing how far apart the parties’ submissions are. Whether the demand is $100,000 or $1.00 more than the offer, StreamSettle sees them as the same.
The settlement value is equal to the midpoint between the successful offer and successful demand. So if the settlement triggering offer is $100,000 and the demand is $95,000, the settlement value is $97,500. Settlement value = (offer + demand )/2.
Up to five positions per party can be streamed per day. However, no party can stream two positions in a row. This prevents position spamming.
Posturing is when parties present settlement positions that are better for them than what they would actually accept at that time. For example, Everett wants to sell his car for $20,000, but he asks for $25,000 to have some room to negotiate and still get his minimum price. Juliet wants to buy the same car for $20,000. Juliet postures by offering only $15,000, hoping that her low offer will ultimately lead the seller to decrease the price to $20,000 or less. Posturing is a natural part of negotiating, but it can really slow things down. The purpose of StreamSettle is to eliminate the incentive to posture in negotiations.
This agreement is based on trust. If one party honors this agreement and the other party does not, the honest party may then be at a disadvantage, especially if the dishonest party denies that they are posturing. StreamSettle removes trust from the equation by eliminating the incentive to posture.
Whether the parties are $1 or $1,000,000 away from each other, it makes no difference on StreamSettle. Either way, there is no settlement and the parties have no more insight as to their opponent’s true position. For example, Elizabeth wants to settle for $5000 but she decides to posture and demands $10,000. Her opponent, Bob, offers $7,500. Both parties learn that there is no settlement but do not learn the values submitted. Bob only knows that Elizabeth demanded more than $7,500 but he does not know how much more. Elizabeth only knows that Bob offered less than $10,000 but does not know how much less.
StreamSettle’s patent pending software uses complex encryption protocols to ensure that all submissions are 100% secure and confidential so that neither side can see the submissions of the other. To provide an extra layer of assurance, StreamSettle is also blind to the values submitted by the parties.
StreamSettle receives your submission in its encrypted format only. The encryption protocol utilized by StreamSettle allows us to compare the encrypted offer with the encrypted demand to determine if the offer is at least as much as the demand without knowing anything else about the actual values of either position.
We refer to this as “position spamming.” Let’s look at an example of how position spamming could play out if we did not have controls in place to prevent it. An Insurer streams a $75,000 offer. The claimant knows that there is an offer out there but does not know how much. To avoid leaving money on the table, the claimant, who wishes to settle for at least $65,000 can start with a much greater demand than that desired amount which, if demanded now, would result in a $70,000 settlement (the midpoint between the $75,000 offer and $65,000 demand). So the claimant first demands $100,000. StreamSettle shows that no settlement has been reached yet so the claimant then submits a demand for $99,000 and sees that there is still no settlement. The claimant continues to incrementally reduce its demand until finally submitting a demand for $75,000, at which point, a settlement would be reached for $75,000. To prevent the use of this strategy, StreamSettle precludes a party from streaming a position twice in a row. This control eliminates the incentive to spam positions and incentivizes genuine (no b.s.) offers.
Not at all. Users can stream up to five positions per day so long as they are alternating between users.
Yes. Parties can withdraw their streamed position at any time prior to settlement. However, withdrawing a position does not affect the alternating position requirement. For example, a claimant who streams a demand and then withdraws that demand must still wait until their opponent streams an offer before they will be able to submit a new demand.
Not necessarily. Parties will likely still want to engage in traditional negotiations (e.g. written demands/offers with position statements) as doing so usually involves much more than just the numbers. Further, many claims require proof of negotiation positions in order to prove elements of a cause of action or to seek certain remedies (e.g. attorney fees, bad faith settlement practices, offers of judgement, etc.). Accordingly, it may be necessary to have such negotiations in writing. Because StreamSettle is only about the numbers, it does not aid the parties in exchanging information that may affect the positions of the parties.
No, StreamSettle itself is unable to provide you with such information. However, you can view your position history by entering in your key phrase. The only number that StreamSettle will have access to is the final settlement amount in the event that the case settles on StreamSettle.
While a successful settlement on StreamSettle may make mediation unnecessary, StreamSettle is a tool that also works well in conjunction with mediation. That is because mediation involves much more than exchanging offers and demands. For example, mediation often includes in-depth discussions about the strengths and weaknesses of the parties’ cases with the intent of bringing the parties’ settlement positions closer together. StreamSettle is only about the numbers and is not intended to facilitate the exchange of information. In all, mediation can still be a very valuable tool for parties using StreamSettle.
The Preferred Mediator Program offers users a way to book mediators directly through the StreamSettle platform. These mediators have been thoroughly trained on how to best use StreamSettle during their mediations. We believe that using the StreamSettle/mediator combo results in the best chance of resolving a claim.
First, parties who use a Preferred Mediator have the best chance at resolving the claim because Preferred Mediators are trained on how to use StreamSettle as an additional tool to assist the parties in reaching a settlement. Second, if the parties book a Preferred Mediator through StreamSettle, they will receive a 50% discount off StreamSettle’s fee for that claim if it ultimately resolves on StreamSettle. Finally, the parties have the convenience of checking availability and booking directly with the Preferred Mediator of their choice through our convenient booking process.
When we officially launch. Accordingly, the Preferred Mediator Program will not be available during the beta program.
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