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Verification Incentives, Governance, and Liability Model

Pitch

Establish a governance framework that aligns incentives for truthful verification, assigns liability for errors, and defines transparent accountability across experts, platforms, and plan owners.

Why

Verification only works if experts are motivated to be accurate, conflicts of interest are managed, and accountability is clear. Without governance, verification risks becoming performative, biased, or legally fragile.

Problem

  • Experts lack standardized incentives for accuracy.
  • Liability for incorrect verification is undefined.
  • Conflicts of interest and bias are not systematically managed.

Proposed Solution

Create a governance and incentive framework that includes:

  1. Incentive structures tied to long-term accuracy.
  2. Liability rules for negligent or fraudulent verification.
  3. Transparent audit trails for verification decisions.
  4. A dispute resolution and appeals process.

Incentive Model

Align incentives with truthfulness:

  • Base fee: paid for verification work regardless of outcome.
  • Accuracy bonus: paid when verified claims are later confirmed.
  • Penalty: applied for negligent or consistently inaccurate verification.

Example incentive split:

  • 60% base fee
  • 30% accuracy bonus
  • 10% at risk (released after outcome validation)

Governance Structure

  • Verification Policy Board: defines standards and acceptable evidence.
  • Audit Committee: samples verification decisions for consistency.
  • Dispute Panel: handles disagreements and appeals.

Liability Rules

Define responsibility tiers:

  • Expert liability: negligence, conflicts not disclosed, fabricated evidence.
  • Platform liability: failure to enforce standards or audit processes.
  • Plan owner liability: false inputs or withheld data.

Liability should be proportional and documented in terms of service.

Evidence Standards and Audits

  • Require evidence-level tagging for each claim.
  • Publish audit trails and verification notes.
  • Randomly audit high-impact plans.

Dispute Resolution Process

  1. Triggered by contradictions or stakeholder complaints.
  2. Independent review by separate experts.
  3. Resolution outcomes: uphold, revise, or revoke verification.

Output Schema

{
  "verification_id": "ver_981",
  "expert_id": "exp_123",
  "evidence_level": "Level 3",
  "audit_status": "pass",
  "liability_notes": ["No conflicts disclosed"]
}

Integration Points

  • Tied to expert marketplace reputation scoring.
  • Used by verification workflow stages to enforce gating.
  • Informs legal and compliance policies.

Success Metrics

  • Reduced rate of verified-claim reversals.
  • Increased investor confidence in verification outputs.
  • Faster resolution of disputes.

Risks

  • Legal complexity across jurisdictions.
  • Overly harsh penalties discourage participation.
  • Governance overhead slows verification cycles.

Future Enhancements

  • Insurance-backed verification guarantees.
  • Automated conflict-of-interest detection.
  • Cross-platform verification standards consortium.

Detailed Implementation Plan

Phase A — Policy and Contract Framework (2 weeks)

  1. Define verification engagement models:
  2. advisory
  3. certifying
  4. mixed
  5. Create contract templates with scope, liability boundaries, and evidence standards.
  6. Add conflict-of-interest disclosure requirements.

Phase B — Incentive Mechanisms (2 weeks)

  1. Implement compensation options:
  2. fixed fee
  3. milestone-based
  4. retainer
  5. Add quality-linked payout modifiers based on review completeness and outcomes.
  6. Add late-response penalties where SLA contracts apply.

Phase C — Governance Controls (2 weeks)

  1. Add quorum rules for safety-critical signoffs.
  2. Add recusal workflows for disclosed conflicts.
  3. Add escalation governance for disputed verification outcomes.

Phase D — Liability and Audit Operations (1–2 weeks)

  1. Add liability ledger linking decisions to signatories and evidence.
  2. Add insurance requirement flags for high-risk review scopes.
  3. Generate governance-ready audit exports for legal diligence.

Data model additions

  • verification_contracts
  • verification_compensation
  • conflict_disclosures
  • liability_events
  • governance_decisions

Validation checklist

  • Contract completeness checks
  • Conflict disclosure coverage
  • Governance escalation turnaround
  • Legal audit package completeness