In the “hot-coffee lawsuit” of 1992, a McDonald’s customer sued the fast-food giant after spilling hot coffee in her lap and suffering third-degree burns. The court ordered the fast-food giant to pay $2.86 million in damages: $640,000 for medical treatment and $2.7 million in punitive damages.

Because McDonald’s was found negligent by not warning customers of the coffee temperature, they now print “Caution – Hot!” on their coffee cups to avoid costly lawsuits in the future.

To understand why McDonald’s paid millions of dollars above the cost of the customer’s medical bills, take a look at the different types of damages that can be awarded in personal injury cases.

What are damages?

If you have a personal injury case, you’re entitled to seek compensation for the harm you’ve suffered. The legal term for this compensation is “damages.” The defendant who caused or contributed to your injury pays your damages.

There are several kinds of damages, and the type of case you have determines the damages you may recover. The two main types of damages awarded in personal injury cases are compensatory and punitive damages. Up first? Compensatory damages.

Compensatory Damages

Compensatory damages reimburse the injured party for the harm they’ve endured. Compensatory damages may be awarded in a wide range of personal injury cases, including but not limited to car accidents, medical malpractice and slip and fall. There are two categories of compensatory damages, special and general.

Special Compensatory Damages

Special damages are injury-specific and cover any expenses or losses related to the injury, like the $640,000 awarded to the plaintiff in the “hot coffee lawsuit.”

Special damages are intended to “make the victim whole again” from expenses incurred or money lost due to the injury – to help the injured person return to the financial state he or she was in before the injury.

There are no limits on the types or amounts of special damages that can be claimed by the plaintiff. Examples of special damages claimed in personal injury cases include:

• Loss of income
• Loss of future earnings
• Medical bills
• Cost of future medical care
• Household expenses
• Costs associated with canceled trips or altered plans

General Compensatory Damages

General damages cover any non-monetary damages associated with an injury. They address the harm that a victim generally sustains when injured. All personal injury victims are expected to have at least some general damages. Some general damages claims include:

• Pain and suffering
• Mental anguish
• Loss of consortium or companionship
• Defamation
• Disfigurement
• Loss or impairment of physical or mental capacity
• Loss of enjoyment of life

Next, let’s discuss punitive damages – the $2.7 million McDonald’s was ordered to pay in the “hot-coffee lawsuit.”

Punitive Damages

Punitive damages are not tied to any harm; rather, they are awarded specifically to punish the defendant by “hitting them where it hurts” — their bank account. Although million-dollar punitive damages cases seem to make headlines often, the reality is that punitive damages are awarded only in a small number of cases, when the defendant’s actions are judged to be “despicable.”

Here are some recent examples of cases in which punitive damages were awarded:

• The R.J. Reynolds Tobacco Company was ordered to pay $23.6 billion in a wrongful-death lawsuit in 2015.
• A Nevada jury awarded $500 million to two UnitedHealth Group members in a 2013 medical-malpractice lawsuit.
• In January 2017, a DuPont chemical plant in West Virginia was found guilty of releasing a cancer-causing chemical into local water. The company was hit with two class-action lawsuits and $10.5 million in punitive damages.

Despite these impressive numbers, the plaintiffs in these cases aren’t becoming instant millionaires from compensatory or punitive damages awards. Let’s find out why.

Collecting Damages

If a judge rules that you will be awarded damages in your personal injury case or you reach a settlement with the defendant, you’ll likely expect to receive payment soon after the verdict.

Unfortunately, damages aren’t always easy to collect – the defendant may not be able or willing to pay the full amount of the damages award.

If you have a personal injury attorney on your case, he or she can help you collect damages by discovering undisclosed assets, placing liens on property and even garnishing wages. The defendant’s insurance company may pay damages awards or settlements up to liability limits.

Additionally, interest accrues on most damages awards until they are paid in full, which may convince the defendant to pay up sooner rather than later.

Next steps in your personal injury case.

Personal injury cases can be confusing and stressful. Hiring a personal injury attorney to handle your personal injury case can help relieve your stress and financial pain caused by personal injuries and associated losses. Personal injury attorneys know the system and will work hard to recover your damages award.

Ready to speak with a personal injury attorney? Contact Coastal Law to discuss your case. Call us for a free consultation or use our online form.