€85,000 for spilling tea on yourself

Leo

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I may be misreading this, but the article clearly refers to the company's legal defence, and mentions it was a case they fought all the way.
Going by what you are saying, then they must not have had the proper insurance in place? Otherwise how did they appoint a legal defence?
It appears to be contrary to the clauses of a Starbucks franchise, as per your comment.
The company is the entity being sued, so the legal team are acting as their defence, so that is all correct. But that legal team will have been appointed by the insurance company and fully directed by them throughout.
 

cremeegg

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I may be misreading this, but the article clearly refers to the company's legal defence, and mentions it was a case they fought all the way.
Going by what you are saying, then they must not have had the proper insurance in place? Otherwise how did they appoint a legal defence?
It appears to be contrary to the clauses of a Starbucks franchise, as per your comment.

Its just an assumption, but is it possible that this is a factor that may have had some bearing on the company's decision to settle for €85,000?
As I alluded to before, the €85,000 does not necessarily stem from the injuries that the child suffered. There may be other mitigating factors that may have prompted the company to settle for that amount.
I don't think so.

I suggest that the insurance company is standing in place of the Starbucks franchise.

The person who was burned sues the coffee shop, because they have insurance the Insurance Co takes over all the responsibility and rights for the defence.

The "company's legal defence" refers to the Insurer who are standing for the company.
 

Purple

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I gave you my opinion already on the settlement with regard to it reasonableness, or otherwise.
It is my happiness, or otherwise, that I considered irrelevant.
Okay, I’ll rephrase the question;
There may well be other factors which drove Starbucks to agree the settlement but that’s a different matter. Given the precedent it sets and the impact such settlements have on small businesses do you think it is a good thing that someone gets €85,000 for the injuries this person suffered?
 

WolfeTone

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Okay, I’ll rephrase the question;
What precedent has it set for small businesses? I think it may set a precedent for large corporations, but not necessarily for small businesses.
What impact has it had?
I accept that such settlements feed into the overall cost of insurance that is applicable to hot food and drinks retailer's, and insurance premiums in general, but im not aware of any significant spike in insurance costs as a result of this settlement for retailer's, are you?

As for the amount, it is simply not conceivable that small independent retailer's of hot food and drink would have offered such an amount as a settlement if they didn't have it, nor is it likely it would it have been sought.
I assume the €85,000 is largely constructed around minimising reputational damage - news travels fast, a settlement of this size or more, if found liable, could make the business news stream of any US media outlet considering the brand involved.
Starbucks reputation is apparently due, to a large extent, built on its customer service - its certainly not for the food, or coffee.

I do think however that a considerable portion of any such settlement for physical injury, could be directed back to the health services that provided the medical care and treatment, after all we all paid for that too.
 
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WolfeTone

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Here is a related story centering around the cost of insurance


The 'compensation system' is cited as the main reason why insurance companies will not insure in the leisure industry.
Im wondering what has changed? Bouncy castles, paint balling, play centres etc have been with us for decades. What is it that in the last number of years has driven insurance companies to withdraw? Have compensation rates increased that much? The frequency of claims increased by much?
I could be wrong, but I am somewhat sceptical. Are there any figures to back up these assertions?
 

Leo

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I'm not sure, probably not. Starbucks is, and it was the Starbucks brand that I was referring to when talking about large corporations.
Starbucks certainly are, but they are not affected in any way by this case. How would large corporations be impacted more that small companies as a result of legal action on a small company?
 

WolfeTone

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Starbucks certainly are, but they are not affected in any way by this case. How would large corporations be impacted more that small companies as a result of legal action on a small company?
I'm not sure. It was just an assumption that, if Coffee Unlimited were found to be liable in a scalding incident of a customer trading under the Starbucks brand, that it may cause some reputational damage to the large corporation.
 

Leo

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I'm not sure. It was just an assumption that, if Coffee Unlimited were found to be liable in a scalding incident of a customer trading under the Starbucks brand, that it may cause some reputational damage to the large corporation.
I'd imagine a large multi-multinational like Starbucks won't even notice any impact from an event like this. But why do you think small businesses would not be affected by such damage?
 

WolfeTone

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I'd imagine a large multi-multinational like Starbucks won't even notice any impact from an event like this. But why do you think small businesses would not be affected by such damage?
I never said small businesses would not be affected.
 

WolfeTone

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I accept that such settlements feed into the overall cost of insurance that is applicable to hot food and drinks retailer's, and insurance premiums in general, but im not aware of any significant spike in insurance costs as a result of this settlement for retailer's, are you?
So to repeat, I never said small businesses would not be affected.
 
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