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You might want to lookup the specifics of the case on McDonalds. The coffee was heated beyond recommended levels and as a result most establishments lowered temps. McDonald’s restaurants were required to serve coffee between 180 and 190 degrees. At this temperature, spilled coffee causes third-degree burns in less than 3 seconds. Home coffee makers typically brew coffee at about 135-150 degrees. McDonalds had over 700 complaints before this. All Mrs Liebeck asked was that McDonlads pay her $2000 hospital bill. They offered $800 so she sued. The details of Liebeck's injury are pretty gruesome, too, but even so, the jury only found $200,000 in compensatory damages (which was reduced to $160,000 based on a 20% comparative negligence finding against Liebeck).

The bulk of the verdict was in punitive damages. The jury found McDonalds grossly negligent based on evidence that McDonalds knew that the coffee was dangerous but kept it that hot anyway as a matter of corporate policy. Liebeck's lawyer suggested in closing that the jury should award two days' of McDonalds' coffee revenue, or $2.7 million, in punitive damages, and the jury agreed. The judge reduced the punitives to 3 times the amount of the judgment. Then the parties settled rather than have McDonalds appeal.

All in all, the system worked. The jury heard the evidence, found McDonalds liable, and found an appropriate amount of compensatory damages. They correctly found McDonalds grossly negligent. They found a disproportionately large amount of punitive damages, but the judge did his job and reduced it.

The pre-suit demand was actually $20,000, most of which was medical expenses. The rest was a small amount to compensate her daughter for her lost earnings in taking care of her, plus about $2,000 for pain and suffering. McDonalds indeed offered $800. I get a lot of personal injury clients who never would have talked to a lawyer if the business had just apologized, paid for the medical bills, and promised to fix the problem.