Making the Case for Lemon Law Arbitration and Settlement
More than 25 years ago, the first U.S. lemon law was enacted in Connecticut. Since then, each state has adopted its own lemon law. This has resulted in a veritable patchwork of provisions and requirements, which understandably often leave consumers perplexed. Complicating the matter is that, while some state lemon laws allow consumers to take manufacturers directly to court, others mandate that car owners participate in a manufacturer- or state-sponsored arbitration program.
Usually, consumers are led to believe that they can participate in arbitration without the help of an attorney. While it’s true that you don’t need an attorney to participate in the arbitration process, manufacturers will put their legal teams to work fighting lemon law claims. More than once, I’ve seen cases where the car maker forces the consumer to jump through hoops, or runs out the clock on a lemon law claim. The truth is that consumers who have attorneys are more likely to succeed in a lemon law claim, both because the lawyer is experienced in lemon law and because it sends a signal to the manufacturer that the consumer is serious and won’t simply disappear.
Having said that, it’s also been my experience that most lemon law cases settle through negotiation or mediation. When a vehicle has a serious defect and the manufacturer refuses to buy it back or replace it, sometimes just the threat of a lawsuit encourages the manufacturer to do the right thing. This is because losing in court usually means that the manufacturer could face the prospect of paying punitive damages or a doubling or tripling of the consumer’s attorney fees. A reasonable settlement benefits both sides – the manufacturer doesn’t have to go through a lengthy court battle that it would most likely lose, and the consumer can get relief without dragging out the process.
Negotiation and settlement is also an option for the consumer whose vehicle doesn’t meet the strict definition of a “lemon” under state law. For example, we’ve often had clients who were able to get equitable settlements for the hassle of having to repeatedly take their vehicles in for repair.
The bottom line is that negotiation and settlement are always sound (and often the best) options in lemon law cases. But it’s important to have the law – and a lawyer – on your side should a lawsuit become necessary.