what about that case with the lady who spilled hot coffee in her lap and then sued McDonald’s for like a million dollars? (...) that case notably involved punitive damages, i.e. liability far in excess of the damages actually incurred, intended to force the company to behave differently. Under the model in this post, punitive damages are absolutely terrible—they’re basically equivalent to bans/requirements, and completely negate Principle 2. In order for liability to work, there absolutely must not be punitive damages.
Reading the Wikipedia page, the lady originally wanted $20,000 = 2× her medical expenses. McDonald’s offered $800. So the lady had to involve lawyers, and the next offer was to settle for $90,000. McDonald’s refused again. Before the trial, a mediator recommended to settle for $225,000. McDonald’s refused again.
From my perspective, McDonald’s brought this on themselves by refusing to pay the original reasonable cost.
Your suggestion is that there should be no punitive damages, only liability for damages actually incurred. That sounds nice in theory. But it ignores the part that in real life, many companies will do whatever they can to avoid paying, assuming that most of their victims cannot spend the time and money to sue them properly. So the actual amount of money paid by the companies will only be 10% or maybe 1% of what it should be.
EDIT:
Do the disagreement votes mean that you disagree with the part that companies will try to weasel out of paying by various means, so in reality they will end up paying much less than they should in theory? I would like to hear an argument to the contrary, because I have a difficulty imagining it.
Reading the Wikipedia page, the lady originally wanted $20,000 = 2× her medical expenses. McDonald’s offered $800. So the lady had to involve lawyers, and the next offer was to settle for $90,000. McDonald’s refused again. Before the trial, a mediator recommended to settle for $225,000. McDonald’s refused again.
From my perspective, McDonald’s brought this on themselves by refusing to pay the original reasonable cost.
Your suggestion is that there should be no punitive damages, only liability for damages actually incurred. That sounds nice in theory. But it ignores the part that in real life, many companies will do whatever they can to avoid paying, assuming that most of their victims cannot spend the time and money to sue them properly. So the actual amount of money paid by the companies will only be 10% or maybe 1% of what it should be.
EDIT:
Do the disagreement votes mean that you disagree with the part that companies will try to weasel out of paying by various means, so in reality they will end up paying much less than they should in theory? I would like to hear an argument to the contrary, because I have a difficulty imagining it.