Sunday, May 29, 2011

Hot Coffee

A good meal often ends with coffee, and I will end my reviews from Hot Docs with a review of Hot Coffee.  

A good movie can change your perspective.  Hot Coffee did that, for me and most of the audience.

The movie is about US civil justice reform which restricts citizens' rights to sue corporations and caps the compensation allowed if they do sue.  The movie documents the orchestrated public relations efforts by corporations and the American Chamber of Commerce to bring about these changes, and nasty interventions in elections to oust people who do not agree with big business' position.  It's a rather horrifying story.  So-called tort reform is a major cause of 'crusading fiscal conservatives', as the Economist describes them and most of the American public has been convinced that desperate changes in the justic system are warranted.  This movie argues that the cure is worse than the disease.

But an audience would have no sympathy for this point of view, because they 'know' all about that famous McDonald's scalding coffee case - the one where the elderly lady drove her car with a coffee cup between her legs, received a mild burn and was awarded $2.86 million in compensation.  It's the poster child for 'frivolous lawsuits' and excessive compensation and sparked public sympathy for the law reforms mentioned above.

So Hot Coffee wisely starts off by debunking the myths around that case.  The woman was a passenger, not the driver.  The car was stopped.  In her attempt to remove the tricky lid to add sugar and cream, she spilled the entire cup of coffee over her thighs, buttocks and groin.  The third-degree burns on 6% of her body were horrific (as shown in gory detail in the movie) and required multiple skin grafts. 

McDonald required franchises to serve coffee at 180-190 degrees, considerably hotter than other establishments, a temperature that can produce third-degree burns in two seconds.  The company had received hundreds of complaints about the temperature of its coffee and failed to respond.  The plaintiff sued McDonald's after they refused her request for $20,000 to cover her out-of-pocket expenses for medical bills and lost income and reaffirmed their determination to keep the coffee temperature as it was.  She felt a lawsuit was the only way to bring attention to the issue.  The jury found in her favour, and calculated the compensation based on two days of coffee sales.

The results of the case were as follows:  McDonald's reduced the temperature of the coffee by 10 degrees; they changed the lid design to make it easier to open the coffee;  a judge reduced the compensation to $640,000 and the plaintiff ultimately settled out of court.  But the unintended consequences were far greater.  The settlement gave the right a poster child for frivolous lawsuits and helped gain support among the public for tort reform.

In the Q&A, the filmmaker asked the audience how many had heard of the McDonald's case and virtually everyone raised their hand.  When asked if their opinion on the case had changed, virtually eveyone left their hands up.  She unabashedly admitted she was one of those maligned 'trial lawyers', acknowledged that there were abuses in the civil trial system, but felt that the direction in US justice system and politics would lead to far worse abuses.

As The Economist put it in a recent article "Frivolous lawsuits are, along with criminal aliens and fraudulent voters, a bit of a bogeyman. They do exist, but are hardly as ubiquitous as the thundering rhetoric would suggest."  

The movie emphasizes how American big business has incredible power against the consumer.  In the US, in many contracts - espeically contracts with cellular providers and banks -  the consumer agrees to  'mandatory arbitration' and forfeits the right to sue the provider.  That doesn't sound too bad, does it?  A neutral arbitrator determines a reasonable settlement and keeps the dispute out of court.  Well, the problem is that the provider chooses the arbitrator, which puts the consumer at a significant disadvantage, and they have to recourse to the courts.  
The Supreme Court of Canada ruled in March 2011 that a customer was allowed to proceed with a class action suit against Telus, despite having signed a mandatory arbitation clause.  So it appears that the situation in Canada is not as lopsided as in the US.

1 comment:

Anonymous said...

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