Punitive damages in a personal injury case are used as a means to punish the wrongdoer, or defendent. It is used as a supplemental form of compensation if a judge determines that other forms (such as non-economic or economic damages) are not enough. Punitive damages for a personal injury case are usually awarded in special cases, and within the state of Oregon, the plaintiff sees little of such compensation.
Say you’ve been awarded punitive damages: the state will take 70% of that, and your lawyer will usually get about 20%, leaving you with only 10%. This amount can then be taxed, which in the end, may leave you with just 5% of the original amount. In the right case, with a proper amount of evidence to prove the need for punitive damages, such a means makes sense, but most injured people are better off seeking only “economic” or “non-economic” damages rather than punitive damages.
Punitive damages are only awarded when the defendant has done something particularly egregious. The most famous case with a punitive damages award is probably the case of the McDonald’s coffee burns:
The McDonald’s Coffee Case—A Myth Explained
There seems to be more and more criticism of personal injury lawsuits, perhaps because people have tried to claim compensation for some very frivolous injuries. We hate frivolous lawsuits more than anyone. We make our living pursuing justice in the courts, and frivolous lawsuits give the courts and justice a bad name. Most personal injury suits are not only valid – they are the only way to ensure that insurance companies and bad drivers are held accountable, and good people are able to pay their medical bills.
The McDonald’s Coffee case is one of the most famous personal injury lawsuits, but it is commonly misunderstood. People think they know all about the McDonald’s coffee case. But there are some facts that are not widely known, that might change your opinion of the verdict. Was the lawsuit frivolous? Here are the facts. You decide.
Stella Liebeck was in the passenger seat of her grandson’s car. She was 79 years old. After picking up coffee at a drive-through window, her grandson pulled over and came to a complete stop so Ms. Liebeck could open the lid to add cream and sugar. She was not driving, and the car was not moving. As she removed the lid, she spilled the entire cup into her lap.
- She received third-degree burns over 6% of her skin, and lesser burns over 16% of her body.
- She was hospitalized for eight days, and required skin grafts and debridement (medical removal of dead tissue).
- Two years of treatment followed.
- Ms. Liebeck asked McDonald’s to settle the claim for $20,000, but they refused.
- During trial preparation, McDonald’s admitted to more than 700 similar claims over the past 10 years.
- McDonald’s admitted that it held coffee at between 180 and 190 degrees. Coffee served at home is usually 135 to 140 degrees.
- A few days before trial, the judge ordered both sides to attend mediation. The mediator, a retired judge, recommended that McDonald’s settle for $225,000. The company refused again.
- At trial, a thermodynamics expert testified that if the coffee had been served at 155 degrees or less, Ms. Liebeck would have avoided serious burns.
- The Shriners’ Burn Institute had published warnings to the fast food industry that they were unnecessarily causing serious burns by serving beverages above 130 degrees.
- A McDonald’s executive who testified for McDonald’s at the trial said McDonald’s knew its coffee could cause serious burns, but had made the decision not to lower the temperature or to warn customers about it.
- The jury awarded Ms. Liebeck $200,000 to make up for her burns. But they also decided she was 20% at fault, so they took away 20% of that money.
- The jury also awarded $2.7 million in punitive damages, which equals about two days of McDonald’s coffee sales. (In Oregon, the state keeps 70% of punitive damages.)
- The judge then reduced the $2.7 million to $480,000, which is equal to about eight hours of McDonald’s coffee sales.
- Finally, Ms. Liebeck settled with McDonald’s in a confidential deal, so we will never know how much McDonald’s ended up paying, though it has been reported to be less than $600,000.
Punitive damages in large cases like this are meant to punish the company for failing to protect consumers. The facts of this case are a great example of how the media has spun some lawsuits to appear frivolous when they are actually legitimate claims with serious injuries. As personal injury lawyers, we hope to combat this negative view of lawsuits so that injury victims do not ever have to face this “frivolous lawsuit” stigma.