The Snohomish County Public Utility District (in Washington State) settled a 5 year lawsuit with Enron. (Snohomish PUD Settles with Enron, Seattle Post-Intelligencer, July 13, 2007.) After so many other scandals, no one even noticed. Or rather I did. There was one comment by a PUD official that caught my attention and that I’ve been chewing on ever since.

Considering Nuances
Snohomish PUD General Manager Steve Klein reportedly said “(Arbitration panels) ‘don’t have to consider the nuances,’” when explaining Snohomish PUD’s decision to settle with Enron. In fact, neither do judges or juries. I mean sometimes, and especially in contracts, the law directs judges and juries to look at the contract and not at the outside or parole evidence.
The lesson that I took away from this is the only suitable and reliable place to consider the nuances to this situation was by negotiating a resolution. I suspect that had Snohomish PUD not filed a lawsuit and had that claim not been set for a hearing before a binding arbitration panel, the parties would not have sat down to consider the nuances.

Last Minute Negotiations
It is a fact of litigation (and I was a full time litigator in Chicago for 10 years) that settlements happen at the very last minute. I know colleagues that negotiated settlements while the jury was entering the courtroom to deliver a verdict.
There is a very strong desire by all human beings to exert some control over their destiny, and turning something over to a judge, jury, or arbitration panel takes away your control. I suspect that this sense of control also played a part in the settlement between Snohomish PUD and Enron. Both parties wanted to exert some control over the outcome and the only way to do that was by negotiating a settlement.

My advice to you
My advice to those of you who may have a lawsuit pending, it is not too late to negotiate. In fact, this may be the best time to negotiate a settlement.

This entry was posted on Friday, July 27th, 2007 at 4:10 pm and is filed under Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.