News

Hot Coffee

Hot Coffee

Friday 3rd November 2017
Sonny Welsh

Reading the article in http://www.irishlegal.com/9131/judge-overseeing-personal-injury-list-attacks-insurers-and-media/ this week reminded me of a documentary I watched a few years ago - and how the Jackson reforms are now hitting the UK hard.

'Hot Coffee' was a documentary (released in 2011) which detailed how tort reform was ushered in, in the US, via powerful lobbyists and media entities. The way this was done was by using, what is commonly known as, 'the McDonald's coffee case' as "the poster child of excessive lawsuits". This case was cited by the media as an example of how the general public were taking advantage of the legal system to receive massive compensation.

You may remember the case, as the news even hit the headlines in the UK. What is known about the case generally, as portrayed by the media, was that a woman spilt hot coffee on herself and managed to get awarded damages of $2.86m. The media went into overdrive making out this lady to be nothing but an idiot and a con artist.

What isn't commonly known, however, was that Stella Liebeck was a 79-year-old woman who suffered third-degree burns in her pelvic region, that the $2.86m was reduced to $640,000, that the majority of the money was spent on medical bills, that she needed two years of medical treatment following the incident, and that McDonalds had been warned about their defective cups and the temperature of their coffee previously. The rest of the money was spent on a live-in nurse until the day of Stella Liebeck's death.

Now, unfortunately, we are seeing the same thing in the UK; the demonization of anyone making a claim for personal injury - on the basis that there are people who make frivolous claims out there. Insurance companies have routinely, with the help of the media, blamed the increase of premiums on the level of general damages awards and Claimants.

Indeed, we only have to look back to the first half of this year when a number of the leading insurers posted increased first-half profits. Of particular note, Aviva grew their operating profit by 11% to £1.46bn. This Law Gazette article from 3 August 2017 makes short, but very interesting reading https://www.lawgazette.co.uk/practice/axa-and-aviva-defy-compensation-culture-to-boost-profits/5062352.article.

Luckily there are brave people like Mr Justice Cross out there who see through this ruse and is willing to speak up.