Bad negotiation? The video below is an interesting short documentary on the McDonald’s coffee lawsuit.  The problem is the judge still AWARDED almost $3 million (this video claims the final settlement was in the $600K range). Did she have injuries?  Yes.  Was McDonald’s liable for medical bills?  Yes.  They should have offered more than an $800 settlement in the beginning especially since her medical bills were$10,000 and she had significant burns that required skin grafting. This type of thing is where the problem lies with lawsuits becoming an income stream in my opinion.

I’m not an attorney, nor do I play one on video or TV.  However, I like to look at legal cases from a negotiation and contracts expert view.  If you mention frivolous lawsuits to anyone, most will remember the McDonald’s coffee burning incident that happened in February 1992.  This may have been the start of frivolous lawsuits that earn people millions of dollars in the court systems today.

[pb_vidembed title=”The Real Story Behind the McDonald’s Coffee Burning Lawsuit?” caption=”” url=”http://www.youtube.com/watch?v=pCkL9UlmCOE” type=”yt” w=”480″ h=”385″]

Lawsuits have become an income stream for some people and many point back to this case as the start of it all.  The judge awarded $2.9 million to a 79 year old woman for the burns that occurred as a result of the spilling the hot coffee she had just purchased from McDonalds.  She got the coffee at the drive thru window and her grandson was driving.  He pulled over so she could put the cream and sugar in.  She opened the lid of the coffee and then spilled it causing severe burns to 16% of her body.  The burns caused her to go into shock and she had to be immediately taken to the hospital for treatment.  If you watch the video, there are photo’s of the severity of the burns.

Her hospital bills were $10,000.  She wrote to McDonalds and they offered her the ridiculous amount of $800.  That’s all it was, an offer.  Apparently McDonald’s had a history of paying out small settlements for burns from the coffee but refused to lower the temperature which was required to be between 180-190 degrees.  It appears they have lowered it 10 degrees since the lawsuit.  Based on previous results, they got away with paying a smaller amount to other people, but this situation was much worse and their attorneys and advisors should have paid attention.  The amount was not fair and reasonable compared to the extent and severity of the injury.

What was the main issue here?  If McDonald’s had actually negotiated a fair and reasonable amount, this would have never gone to any kind of a trial.  The public makes a decision about what the actual results of the lawsuit were and the public sees a money hungry woman based on the amount of the settlement.  Why do we feel it’s fair and reasonable to award such exorbitant amount?  All she wanted was the hospital expenses covered.  I can see some reasonable amount for pain and suffering as it affected her quality of life significantly, but millions of dollars?  For what?

Unfortunately this has paved the way for many lawsuits of extraordinary amounts to hit the courts.  Just google frivolous lawsuits and you will see an unending list of them.  A couple of years ago a mom in San Diego sued Nutella for false advertising and won.  It turned out to be a $3 million class action suit of which she was awarded $500,000.  Really?  $500,000?  Because she didn’t read the label and instead believed the ad?  When does it become our responsibility to read the labels and take responsibility for our own actions?  That’s a topic for another post as that discussion will be too long for this one.

Bottom line, if McDonald’s had been willing to be fair and reasonable in their negotiations, this type of thing would never have happened and we might not have had the lawsuit lunacy that we have today.  Sometimes we just don’t consider the long term affect our actions may have on a particular situation.  When you go into a negotiation, evaluate the consequences upfront about how the outcome may impact not only your negotiation, but the rest of the world.