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Compensation culture

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MatC
16489.  Wed Mar 23, 2005 12:01 pm Reply with quote

“The Subterranean Railway” by Christian Wolmar (Atlantic Books, 2004) discusses the Big Wheel at Earls Court, a pre-London Eye tourist attraction, a 300-foot diameter Ferris wheel built in 1895. During its 12-year life it had 2.5 million visitors. “Ironically the biggest lure seems to have been the prospect of a breakdown. In May 1896, the company running the tower responded to the one prolonged failure by paying each of the hundreds of people who had spent all night dangling in mid-air the sum of £5, equivalent to several months’ wages for many of them. Consequently, a queue of 11,000 people hoping for a similar mishap built up the following day.”

It seems (from the same source) that compo-culture was a noted problem in Victorian times, because of the coming of the railways; for the first time, I suppose, there existed hugely-capitalised companies, serving an enormous and diverse public, with a product which was inherently (potentially, at least) dangerous. Is it possible that we have, over the last century, become *less* litigious as a nation ... ?

 
eggshaped
16890.  Wed Mar 30, 2005 6:05 am Reply with quote

The "Stella Awards" website, http://www.stellaawards.com/, could be a good place to look for compensation stories. I can't vouch for how reliable the stories are, but it looks reliable in a snopes-ey kind of way.

I found this very interesting, it's a two-sided commentry on the famous case of the woman who burned herself with McDonald's coffee.

(copied in full)

Quote:
How about, for instance, Stella herself? Much of the coverage about Stella Liebeck has been grossly unfair. When you have a more complete summary of the facts, you might change your mind about her. Or maybe not -- that's up to you. Did you know the following aspects of the Stella vs. McDonald's case?

Stella was not driving when she pulled the lid off her scalding McDonald's coffee. Her grandson was driving the car, and he had pulled over to stop so she could add cream and sugar to the cup.

Stella was burned badly (some sources say six percent of her skin was burned, other sources say 16 percent was) and needed two years of treatment and rehabilitation, including skin grafts. McDonald's refused an offer to settle with her for $20,000 in medical costs.

McDonald's quality control managers specified that its coffee should be served at 180-190 degrees Fahrenheit. Liquids at that temperature can cause third-degree burns in 2-7 seconds. Such burns require skin grafting, debridement and whirlpool treatments to heal, and the resulting scarring is typically permanent.

From 1982 to 1992, McDonald's coffee burned more than 700 people, usually slightly but sometimes seriously, resulting in some number of other claims and lawsuits.

Witnesses for McDonald's admitted in court that consumers are unaware of the extent of the risk of serious burns from spilled coffee served at McDonald's required temperature, admitted that it did not warn customers of this risk, could offer no explanation as to why it did not, and testified that it did not intend to turn down the heat even though it admitted that its coffee is "not fit for consumption" when sold because it is too hot.

While Stella was awarded $200,000 in compensatory damages, this amount was reduced by 20 percent (to $160,000) because the jury found her 20 percent at fault. Where did the rest of the $2.9 million figure in? She was awarded $2.7 million in punitive damages -- but the judge later reduced that amount to $480,000, or three times the "actual" damages that were awarded.

But...

The resulting $640,000 isn't the end either. Liebeck and McDonald's entered into secret settlement negotiations rather than go to appeal. The amount of the settlement is not known -- it's secret!

The plaintiffs were apparently able to document 700 cases of burns from McDonald's coffee over 10 years, or 70 burns per year. But that doesn't take into account how many cups are sold without incident. A McDonald's consultant pointed out the 700 cases in 10 years represents just 1 injury per 24 million cups sold! For every injury, no matter how severe, 23,999,999 people managed to drink their coffee without any injury whatever. Isn't that proof that the coffee is not "unreasonably dangerous"?

Even in the eyes of an obviously sympathetic jury, Stella was judged to be 20 percent at fault -- she did, after all, spill the coffee into her lap all by herself. The car was stopped, so she presumably was not bumped to cause the spill. Indeed she chose to hold the coffee cup between her knees instead of any number of safer locations as she opened it. Should she have taken more responsibility for her own actions?

And...

Here's the Kicker: Coffee is supposed to be served in the range of 185 degrees! The National Coffee Association recommends coffee be brewed at "between 195-205 degrees Fahrenheit for optimal extraction" and drunk "immediately". If not drunk immediately, it should be "maintained at 180-185 degrees Fahrenheit". (Source: NCAUSA.) Exactly what, then, did McDonald's do wrong? Did it exhibit "willful, wanton, reckless or malicious conduct" -- the standard in New Mexico for awarding punitive damages?

The Court of Public Opinion has also issued its verdict: Stella has become an American icon. Rightly or wrongly, she is a symbol of the American Tort system gone wrong, and most have heard of her case -- and have an opinion on it. For more than 10 years, the term "Stella Award" has been used to refer to any lawsuit that sounds outrageous.

Because of this huge name recognition, we chose to continue the name that has captured the public's attention like no other: "Stella Awards". But rather than use fabricated stories to illustrate a real problem, our goal is to legitimize the "Stella Awards" name by reporting real case stories (in the This is True tradition) to get the point across much more powerfully.

 
Flash
16894.  Wed Mar 30, 2005 6:48 am Reply with quote

That's interesting. In the UK there's a case which isn't about compensation but which used to be quoted a lot as evidence of PC-gone-mad. It concerned a mixed race couple who said that they had been refused as adoptive parents because they were a happily multi-racial family and so not sufficiently conscious of the negative consequences of racial prejudice. Virginia Bottomley, not a known bleeding-heart liberal, was the minister responsible, and she instituted an enquiry into the decision. The adoption service was unable to disclose the reasons for its decision publicly because of confidentiality rules, but the enquiry confirmed their decision, also for reasons they weren't allowed to disclose. So there were evidently two sides to the story, although Daily Mail readers et al only ever heard one of them.

 
MatC
28531.  Thu Oct 27, 2005 6:49 am Reply with quote

Compensation culture is “a myth,” according to a TUC report:
- Less than 1 in 10 of the 850,000 people injured at work every year in the UK receive any money at all from their employer or from the state.
- Where money is paid, the average settlement is around £7,500.
- The number of cases involving compensation claims against employers has fallen in the past five years.
- (Morning Star, July 28 2005).
A google search for "compensation culture a myth" turns up many more such reports and studies.

 
Flash
28534.  Thu Oct 27, 2005 7:06 am Reply with quote

What isn't a myth, however, is that rising premia for insurance against compensation claims is making various businesses uneconomic. Riding schools are an example - it's increasingly difficult for them here, and in America they hardly exist any more. It's quite hard to see who benefits from this: the business closes down, the amenity disappears, even the insurance company loses out because no-one can afford to take out the policies. The only winner that I can think of is someone who would have been injured if he had been able to find a riding school, but wasn't because he couldn't.

 
Caradoc
28606.  Thu Oct 27, 2005 7:42 pm Reply with quote

Flash wrote:
What isn't a myth, however, is that rising premia for insurance against compensation claims is making various businesses uneconomic. Riding schools are an example - it's increasingly difficult for them here, and in America they hardly exist any more. It's quite hard to see who benefits from this: the business closes down, the amenity disappears, even the insurance company loses out because no-one can afford to take out the policies. The only winner that I can think of is someone who would have been injured if he had been able to find a riding school, but wasn't because he couldn't.


I work in insurance, there has been an increase in claims, the amounts paid in compensation has not increased hugely, however the number of claims have increased. As companies like claims direct etc are no win no fee (just take out an insurance policy to cover our fees if we loose) & our courts don't operate to allow for contingency fees ($10m settlements, lawyers get $7m) the result has been that the offers to plaintiffs have lowered, so total claims settled has stayed about the same, but the lawyers (on both sides) & claims companies are laughing all the way to the bank & our insurance premiums skyrocket.

These are chicken feed compared with government enquiries though, the last time I looked the Bloody Sunday enquiry in Northen Ireland had passed the £300m mark for legal fees.

 
Jenny
28611.  Thu Oct 27, 2005 8:47 pm Reply with quote

Quote:
Riding schools are an example - it's increasingly difficult for them here, and in America they hardly exist any more.


Well there seem to be quite a few in my part of Maine!

The liability insurance thing is a real problem though. My husband is an architect, and the premiums he was quoted were $10,000 a year eight years ago. This is ludicrous for a one-man business where income fluctuates wildly from year to year, so he simply doesn't have any and tries very hard not to make any mistakes. However, many towns will now only employ architects with liability insurance, so there are now jobs he can't go after. An architect's liability for his buildings lasts for ten years from the date of construction, so you can imagine a scenario where an architect who retired nine years ago and has no earned income is suddenly pursued...

He solves the problem by not owning anything, so that there is nothing anybody could get out of him however hard they tried.

 
Flash
28627.  Fri Oct 28, 2005 5:04 am Reply with quote

Quote:
Well there seem to be quite a few in my part of Maine!

It was Maine I particularly had in mind - I tried to organise a ride on the Appalachian Trail recently, called round the riding establishments in that area and found that they had ALL stopped doing trail rides altogether, specifically citing the insurance issue. There were still some that offered riding lessons in an enclosed school, though, that's true.

 
Jenny
28661.  Fri Oct 28, 2005 9:24 am Reply with quote

That may be to do with the Appalachian Trail area too Flash, because they get so many tourists in that area. Where I live in Gorham, near Portland, there are a lot of riding schools who ride in both enclosed areas and on local trails.

 
Flash
28680.  Fri Oct 28, 2005 11:22 am Reply with quote

Then I withdraw my assertion.

 
Flash
29455.  Thu Nov 03, 2005 4:26 pm Reply with quote

Here's another thing, though. From Melvyn Bragg:

Quote:
young people are not being attracted to chemistry because of the draconian application of Health and Safety rules. The sort of experiments that we did in labs with Bunsen burners and mixing things and hoping for bangs and liking to see fermentation and bubbling and grizzling, has now been banned. A teacher stands behind a glass screen and demonstrates. In other words, ... it seems to be no fun at all for students who are peeling away from chemistry en masse.


Is this true, dot, Nat, et al? No experiments in chemistry lessons these days?

 
Zaphod Beeblebrox
29457.  Thu Nov 03, 2005 4:33 pm Reply with quote

Hmm, nope. Experiments all the way. That's part of what gets assessed during the course, I thought?

 
Natalie
29460.  Thu Nov 03, 2005 4:38 pm Reply with quote

'Tis true, it sho' is true.

Our Chemistry teacher, with a fake name, used to stand behind plastic.

Actually, I have just noticed a massive error by Monsieur Bragg - glass screens. How silly of him. Glass shatters, therefore, no glass screens.

The goggles are MASSIVE man, and if you're wearing glasses too, you end up with goggles half way down your face. Sigh. Experiments are limited, and exciting ones are done by the teacher, behind a screen.

Well, I'm not bothered. I don't do it anymore.

Ha.

 
Pyreo
29466.  Thu Nov 03, 2005 4:44 pm Reply with quote

All the experiments we do (and are assessed on) are pretty dull, but we usually find ways to liven things up. Amazing your friends by passing your hand through a bunsen burner flame is always fun.

 
dr.bob
29501.  Fri Nov 04, 2005 9:41 am Reply with quote

I found the best solution was to befriend the Chemistry teacher. That way, if he mentioned something in class about "of course, if we used subtally different chamicals in this reaction, we would end up with a highly explosive mixture", it was relatively easy to convince him to cook up a batch of the explosive stuff for a private viewing after class :)

 

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