... a jury of her peers ultimately awarded Liebeck $160,000 in compensatory damages (for medical bills and the like) and $2.7 million more assessed as punitive damages against McDonald's.
About the Gourley case, Cohen says:
When Gourley's parents sued, Nebraska law capped their damages at a total of $1.25 million, an arbitrary figure far short of the $6 million the family established it needed to take care of their son for the rest of his life. A jury, which was not told of the state cap, had awarded the family $5.6 million to help pay for Colin's care.
Cohen believes the award in the McDonald’s case was appropriate and that Gourley’s parents should have received the $5.6 million the jury awarded them to care for their son. But these cases are substantially different: punitive damages are not the same as compensatory damages.
In the McDonald’s case, the jury believed McDonald’s was acting irresponsibly and wanted to encourage them to behave better in the future. I might argue that such encouragement would better come in the form of legislation but even if we grant that juries should be assessing punitive damages, why do they go to the plaintiff? Compensatory damages, yes: the McDonald’s customer may well have deserved repayment for the costs she incurred from coffee McDonald’s knew was hot enough to cause severe burns. And I have no objection to her attorney getting some cut of the punitive damages; we want people like her to be able to find lawyers. But why should the plaintiff get any of the money being assessed to encourage McDonald’s?
It seems to me that when the public opposes “frivolous” lawsuits what they’re really opposing is plaintiffs being able to actually make money by suing. If we do away with the profit aspect, then lawsuits are simply about plaintiffs being repaid for money they are out due to bad behavior on the part of the defendant. (I can't actually figure out where the punitive damages should go instead. Every idea I come up with has bad incentives for someone.)
The Gourley case is utterly different. No legislature should be capping compensatory damages. That’s insane. If someone’s bad behavior results in a financial loss or burden then the bad actor should pay up. The plaintiff can present his financial evidence, the defendant can counter with his own, and then the jury can - as Cohen argues they should - decide on a number.
What about pain, suffering, loss of reputation? Well, loss of reputation can sometimes be quantified and, if so, it should be; it can then be treated as a matter of compensatory damages. Beyond that, I’d say cap compensatory damages for pain, suffering, and loss of reputation at some fixed number like $1 million. Is it heartless to put a dollar limit on, say, the loss of a beloved spouse or child? Perhaps, but if so the heartlessness arises from an attempt to assign a monetary value to such a loss in the first place.
Break In by Dick Francis - A cautionary tale about (in part) a system in which a plaintiff whose suit does not succeed must pay the defendant’s legal fees.