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View Full Version : Lawyers & McDonalds?!?


Flying Lawyer
24th Feb 2004, 05:12
Although I agree with your sentiments about compensation in such circumstances, Rwy in Sight's thoughts may not be as daft or unthinkable as you believe.

Remember the famous (or notorious) McDonalds coffee case in the US?

An old lady sitting in her son's car gripped the cup of hot coffee between her thighs while she took off the plastic lid to add cream. When the lid came off, the coffee spilled (surprise, surprise) and she was scalded.
She demanded $20,000 in compensation from McDonalds. When they refused to pay, she told her lawyers to sue.
A jury found McDonalds liable and awarded her:
$200,000 (yes, hundred) compensatory damages for her injuries, reduced to $160,000 because they considered she was 20% to blame for her injuries (only 20%? :rolleyes: ),
plus
$2.7 million (yes, million) in punitive damages for McDonalds' 'callous conduct' towards her - nothing to do with her injuries. (The trial judge reduced this to $480,000.)

Only in America? No. The 'compensation culture' has spread to many other countries, including the UK.

Note: I'm told by American attorneys the $640,000 award wasn't actually paid. In post trial negotiations between the lawyers, McDonalds agreed not to appeal and she agreed to accept a lesser sum. The parties agreed that the amount of the settlement would not be disclosed.

Bealzebub
25th Feb 2004, 00:08
Indeed Flying lawyer, but before anybodies ire gets too elevated would it not also be fair to point out that the said hamburger company are themselves notorious litigators who would have been well advised. Additionally the coffee was served for the purpose of transportation ( was it unduly hot ?). Did the old lady prove her damages to the tune of the $20,000 she was claiming ? Given her partial negligence and subsequent award of $160,000, isn't it the case that her lawyers would have been entitled to a sum in the region of 60 -70% of this award ( as the case had progressed to trial) thereby reducing the ladies damages to a sum of $56,000 (35%) or thereabouts, less disbursements of course. Punitive damages in the US are often used to punish corporations and to focus their attention on the wisdom of using their financial clout to oppress potential litigants.

Of course as you well know in the UK very few claims for compensation are heard by a jury. The process of litigation is weighted heavily against the injured party, who might have to wait years for their claim to be heard. There is precious little in the way of punitive potential for a large company to settle valid claims. Punitive damages are all but non-existant in the UK in such claims. It is not at all unusual for a large corporation to ridicule and often belittle claimants in cases of personal injury, some serial injurers make it their standard modus operandi.
Whatever the real facts of this ladies case, she claimed the sum of $20,000 in compensation for damages. A jury of her peers awarded her a higher sum. The company was then punished for taking this case to trial and losing.

Here in the UK of course most peoples view (rightly or wrongly) of compensation is derived from the plethora of TV and newspaper adverts for "law firms", advertising their ability to obtain a few thousand pounds compo' for any minor misadventure. In the interests of balance though it should perhaps be mentioned that there are many real and serious cases out there, and the process ( from a fiscal standpoint) is still stacked in favour of the big companies, for whom we shouldn't lose much sleep.

Would you not agree ?

IFTB
25th Feb 2004, 02:47
I am not sure how this thread got 15753 reads within a few hours, but never mind, the mods know what they are doing.


IFTB

tacpot
25th Feb 2004, 07:01
My guess regarding the number of hits this has had is due to McDonalds' automated litigation search engines. These search the web for references to McDonalds and register the site and any related information with the McD lawyers, who then decide how and where to instigate legal proceedings.



The facts are less exciting but simpler.
This thread was split from another thread that had many hits.
PPRuNe Admin

spork
25th Feb 2004, 07:12
We had a local trademark “incident” which was puzzling since it involved Chinese Take-away food (http://ash-vale.com/mcchina/legal.htm) which McDonalds have never claimed to provide.

Additionally, not long ago, a restaurant a few miles away, the Red Lobster, was forced to change its name to the Red Mobster after an American chain took legal action too. Do these morons really think we could mistake a Chinese take-away outlet, and a small English restaurant for their magnificent emporiums?

We're so, so lucky to have all these people with our interests at heart.

Flying Lawyer
25th Feb 2004, 08:17
Would I not agree? Phew!! Quite a few points to consider. ;)

before anybodies ire gets too elevated
I understand the widespread public reaction to the case; same as the widespread lawyers' reaction.
McD well advised.
I assume so. I also assume they warned McD there was a risk she might succeed on liability. However, I doubt if many lawyers would have foreseen a jury finding her only 20% to blame, and doubt if any lawyer would have foreseen the staggering $2.86 million the jury awarded. It made world news at the time, and is still frequently mentioned 10? years later.
served for the purpose of transportation
If that’s the same as a ‘take-away’ (or ‘to go’ in American parlance), yes.
unduly hot?
No such thing in my view, but the jury thought so. I expect coffee to be hot.
Did the old lady prove her damages to the tune of the $20,000 she was claiming?
The jury obviously thought so – they found in her favour and awarded $200K less 20% for her own negligence. Her lawyers considered $20k (max) was a realistic starting-point for negotiations. Either they were hopelessly incompetent, or the jury went OTT.
damages (reduced) to $56,000 (35%) or thereabouts, less disbursements
I haven't done the maths but, assuming your figures are accurate, that’s the contingency fee system, for better or worse. It’s not one-sided. If she’d lost, she’d have walked away and her lawyers would have borne the costs. As it transpired, both she and they got an unexpected windfall.
in the UK very few claims for compensation are heard by a jury.
True. But, even in those relatively few cases, there have been some absurdly high awards (eg libel) which brought the procedure whereby juries decide the amount into widespread disrepute.
litigation weighted heavily against injured party who might have to wait years for their claim to be heard.
Litigation, like most things in life, costs money. An injured party who isn’t wealthy, but whose savings/income are above the qualifying limits for state funding, is in the worst position to sue. In that sense, it’s weighted against an injured party, especially if the defendant is a wealthy individual or company.
On the other side of the coin, being sued by a publicly-funded Claimant can be a nightmare for a privately-funded Defendant because, even if the Claimant loses, the Defendant can't recover the costs of defending. Also, much of your post appears to be predicated on the assumption that the injured party is always David and the Defendant is always Goliath.
Litigation takes time. Recent procedural reforms have reduced delay, but there aren’t an infinite number of judges or court-rooms. The ‘compensation culture’, which has grown and continues to grow, doesn’t help people who have sensible claims waiting to be heard.
precious little punitive potential for a large company to settle valid claims.
In the UK, the penalty for losing is paying the winner’s costs. It’s not as one-sided as you imply. If a Claimant brings a silly claim, the winning Defendant may be unable to recover its costs. eg. If the Claimant simply hasn’t got the money to pay.
Contrary to what you appear to believe, most large companies take a commercial view – ‘Are we likely to be found liable? Even if we think we’ll win, how much will it cost us to make the problem go away (make an acceptable offer) compared with the cost in the time of key personnel/legal costs/bad publicity to fight? Apart from initial posturing, very few in my experience deny liability where the claim is obviously valid. Like all Defendants, they wish to pay as little as possible - just as Claimants wish to obtain as much as possible. Defendants often admit liability but contest the amount claimed if it's too high.
Punitive damages all but non-existant in UK in such claims.
Punitive damages aren't used for the purpose of ‘punishing’ parties who lose. (See 'costs' above.)
not at all unusual for large corporation to ridicule and often belittle claimants in cases of personal injury
True. Nor, sadly, is it at all unusual these days for people to make ridiculous claims. (See ‘compensation culture’ above.) It’s not as one-sided as you imply.
most peoples view ….. plethora of TV and newspaper adverts for "law firms", obtain a few thousand pounds compo' for any minor misadventure.
True. What’s your view of that culture? (Mine must be clear by now.) And, although I have no illusions about lawyers ever being popular, I don’t think they help the public image. All lawyers are the same, aren’t they?

I haven’t suggested anyone should ‘lose much sleep’ over wealthy companies being sued and/or paying out large sums in damages.
What I do think is ludicrous, but I haven’t lost any sleep over it, is:
that the jury found her to be only 20% to blame for her misfortune;
that someone whose injuries were considered by her own lawyers to be worth a maximum $20,000 can be awarded $160,000 by ‘peers’ having no expertise or experience;
that, if it was necessary to ‘punish’ McD, and necessary to make it a substantial amount because of McD’s enormous wealth, that the ‘punitive damages’ should go to her - or her lawyers. ;)

In reality, both sides must have accepted the amount awarded was ludicrous and was highly unlikely to be upheld on appeal. They reached agreement after the case as I described earlier.

In order to avoid any misunderstanding -
I represent Claimants and Defendants, individuals and international corporations. And, as Pprune regulars will know, I never try to argue the legal system can't be improved. I've tried to give a balanced explanation in response to your general points.

Bealzebub
25th Feb 2004, 09:22
Indeed you have FL. I suspect that it didn't really matter if any, none or both sides did accept the sums were "ludicrous" the reality was that the hamburger company could well afford the appeal. The claimant would have received nothing pending the process which itself might have dragged on for years ( she was an elderly lady). The corporations basis for an appeal had seen the issue of liability dissolve and merely rested on quantum (how noble!).

There is a great deal of sentiment on these forums that companies should not be subjected to lawsuits from people they might have injured. Indeed it is often blamed on the so called "compensation culture". However it needs to be balanced by the fact that companies ( and their employees) do not have the right to injur people or cause them harm. In cases where they do or they allow this to happen, then the damaged party has a right to seek redress. Given the fiscal muscle that a large company can use it is rarely an even contest. In the case you cited all may not have been as it might have been reported in the press. As far as the Jury being "peers with no expertise or experience", isn't that usually the case with juries. The expertise would have been provided ( and paid for) by the claimants and defence teams and presented to the jury. If a jury can deliver a verdict that results in someone being jailed for life or even put to death (in some forums) then the fact they can award a scolded old lady $160,000 shouldn't cause anybody too many qualms.

Without specific citation there have been numerous case of large corporations involved in the manufacture of automobiles and tyres who have decided that is cheaper to not recall vehicles with defective fuel tanks, or tyres that are known to disintigrate, simply because it was deemed cheaper to defend the limited likely lawsuits than to rectify a costly problem. A few hundred thousand dollars is of course adequate recompense for having your husband/wife /son or daughter killed or maimed by these corporate giants. Even if it is not adequate recompense it is all that will ever be on the table. In the US a company might find itself in such a position of being liable to their victim for the damages a sympathetic jury sees fit plus an effective punishment that makes their eyes water.
In the UK a judge might award the same victim an amount he is persuaded is adequate and the company might have to pay ( if the victim is really lucky) indemnified costs. I really don't see this as quite such a punishment.

If I gave the impression that my post was predicated on the Claimant (David) and defendant (Goliath) assumption, it was because you cited the McDonalds case when that was so. As you have aluded to, unless a claimant is legally aided the "poker game" that litigation often is will favour the corporate giant.

As I am sure you appreciate in raising these issues, I am attempting to offer another viewpoint.

Taildragger55
25th Feb 2004, 18:24
Fl

Your balanced and rational discussion of legal matters is making it difficult for me to continue in my irrational hatred of the legal profession

Please desist at once