Ladenburg | Kramer, PLLC Attorneys At Law

Ladenburg | Kramer, PLLC  |  1019 Pacific Avenue, Suite 1116, Tacoma, WA 98402
Home Areas Of Practice Published Articles Legal Links Frequently Asked Questions Facts And Myths


For a free initial consultation, please call (253) 272-5226, Fax (253) 295-2326, or email
Erik Ladenburg,
John Ladenburg or
Jennifer Kramer

Disclaimer

Facts and Myths about lawsuits and "runaway juries".

In recent years businesses and insurance companies have made a concerted effort to persuade the public that the civil justice system is out of control and in need of "tort reform". They argue that juries can no longer be trusted to render fair verdicts. They often refer to the McDonald's Coffee Case and other high profile cases as examples of out of control juries. The facts, however, do not support these assertions. The legal revisions that these groups support would only gut our system's ability to force wrongdoers to compensate their victims and change their harmful conduct.

MYTH: Personal injury lawsuits and other tort claims clog our courts.

FACT: Tort claims account for only about 7.5% of all civil claims filed in state courts, according to the most recent data compiled by the nonpartisan National Center for State Courts (NCSC). Of the 19.7 million civil cases filed in 1992, about one million were tort cases, the center reports.

MYTH: Medical malpractice lawsuits dramatically increase the cost of healthcare.

FACT: Medical malpractice premiums amount to less than 1 percent of national health care costs, according to the U.S. Congressional Budget Office. Eliminating medical liability altogether would thus do little to contain health care costs.

MYTH: Most medical malpractice claims are frivolous.

FACT: : Between 44,000 and 98,000 Americans die each year (and 300,000 are injured) due to medical errors just in hospitals. Yet eight times as many patients are injured as ever file a claim; 16 times as many suffer injuries as receive any compensation. National Academy of Sciences Institute of Medicine, To Err is Human, (1999); Harvard Medical Practice Study (1990).

MYTH: Most lawsuits are filed by whiners who are not really hurt.

FACT: In reality, very few injured Americans file lawsuits. Only 10 percent of injured Americans ever file a claim for compensation, which includes informal demands and insurance claims. Only two percent file lawsuits. Compensation for Accidental Injuries in the United States, Rand Institute for Civil Justice (1991).

MYTH: The costs associated with our liability system exceeds $300 billion.

FACT: The Rand Institue for Civil Justice estimates that $14-$16 billion was paid out to injured victims through the tort system in 1985. This averaged out to about $29,000 to $36,000 per case. These numbers pale in comparison to the costs of injuries and accidents. The national Safety Council estimates that accident costs totaled $399 billion in 1992.

MYTH: The tort system is driving up insurance costs.

FACT: Annual insurance and claims costs for U.S. businesses were only $5.25 for every $1,000 in revenue in 1997. Moreover, these costs have been declining significantly -- down 37% over the last five years. Ernst & Young and the Risk & Insurance Management Society (1998). Products liability insurance costs, per $100 of a retail product, are only 16 -- a tiny fraction equaling less than 2/10 of 1 percent. Adjusted for inflation, products liability insurance costs have fallen about 75 percent over the last decade. Consumer Federation of America (1998).

MYTH: The tort system is only a tool for lawyers to get rich.

FACT: The tort system has been one of the greatest catalyst for social change and accountability in this country. The Consumer Federation of America estimates that about $6,000 deaths and millions of injuries are prevented each year because of the deterrent effect of products liability. Lawsuits have force companies to design cribs that no longer strangle infants, trucks that have back-up alarms, auto fuel systems that are less dangerous, removal of cancer causing asbestos, and safety guards on once dangerous machines. Click here to learn more about cases that have made a difference.

CONCLUSION: Tort reform is the agenda of big corporations and insurance companies. These companies have engaged in a multi-million dollar effort to persuade the American public that the tort system is out of balance. The fact is that most injured Americans do not file lawsuits and the cost of lawsuits on the economy is minimal. Tort reform backers often point to odd ball cases and alter the facts so that it appears that the whole system is out of balance. The system, however, works. It compensates the injured and holds the wrongdoers accountable. For more information on consumer rights click here.




The McDonald's Coffee Case


MYTH: An opportunistic old woman launched a frivolous lawsuit when she spilled her McDonald's coffee on her lap.

FACT: Lieback was sitting in the passenger seat (not driving as reported) of her grandson's car holding a coffee after purchasing it from a drive-through window of a McDonald's. When she opened the lid to add cream and sugar, she spilled the coffee. (The car was stopped when she attempted to open the lid, not moving as reported in the papers).

The simple accident caused third-degree burns on more than 6 percent of her body, including her inner thighs, perineum, buttocks, and genital areas. She was hospitalized for 8 days. She under went skin grafting and debridement treatment. She has permanent scarring on 16% of her body from the burns and skin grafting.

McDonald's served coffee 20 or so degrees hotter than the industry standard. McDonald's had already ignored more than 700 similar claims of coffee burns, many involving children. The company even ignored a request from the Shriner's Burn Institute in Cincinnati to turn down its coffee. Other establishments sell their coffee at substantially lower tempatures, and coffee served at home is generally 135 to 140 degrees. McDonalds served their coffee at between 180 and 190 degrees Fahrenheit. At that tempature, liquids will cause third degree burns on human skin in 2 to 7 seconds. If the coffee was 155 degrees the danger of serious burns would have been much, much lower.

McDonald's refused to pay the then 79-year-old woman's initial medical expenses totaling $11,000. McDonald's actually countered with an offer of $800. And they also refused to turn down the heat on their coffee. Left with $20,000 unpaid bills, she finally hired a lawyer.

A mediator later recommended the parties settle for $225,000. Again, McDonald's refused and the case went to trial.

McDonald's representatives lied to the court and jury about the existence of other claims. A jury reduced the original verdict of $200,000 to $160,000 for contributory negligence - Liebeck spilled it on herself.

Based on McDonald's annual profits of more than $1 billion annually, and more than $1.3 million gross daily coffee sales, the jury levied two days of coffee sales receipts as punitive damages for a punitive damage award of $2.7 million.

A judge later reduced the $2.7 million jury award to $480,000. McDonald's later settled the case for an undisclosed amount, requesting the deal be kept sealed. Most major newspapers ignored the judge's reduction and the final outcome of the case.

Click here for the FACTS on other high profile and often misreported cases.