— -- Remember Stella Liebeck, better known as the woman who won millions of dollars after a cup of hot McDonald’s coffee spilled on her lap?
A few years ago, her jury award became fodder for every tort reform advocate in the country. A seemingly incredulous public declared the case a perfect example a court system gone awry — too many people bringing cases and too many juries handing out big punitive damage awards.
But what got little attention was the fact that Liebeck didn’t end up with the initial windfall. A court reduced the verdict and the parties evenutally settled for less than $640,000. Some argued that was still too much, while others maintained it was just compensation for being burned and brought about worthwhile change — McDonald’s did end up lowering the coffee temperature to avoid future burns.
Read on as ABCNEWS.com takes a look at jury awards and the debate over whether they’re a useful tool for change.
What’s the Damage?
How much is an arm worth? An eye? How about two legs and hearing in one ear?
Those are the questions juries must answer when deciding what compensatory damages — money to compensate for pain, suffering, lost earnings and bills — to award. It’s a peculiar algebraic exercise where people’s lives and limbs do not have fixed value.
Plaintiff lost her voice in a botched surgery? She’ll get more money if she’s an opera singer than a computer programmer. A child and a CEO both killed in a car crash? Jurors may find that the child’s life is worth less monetarily than the highly paid executive.
While compensatory damages are always part of the verdict, the real money comes from punitive damages, awards given to punish bad behavior. The amount usually depends on the wealth of the losing party. This is “hit ’em where it hurts” time. The more egregious the behavior is judged to be, the bigger the award. Jurors often sift through financial statements and earnings reports to come up with a number they think will keep the defendant from ever doing wrong again.