When your car is a lemon, and you are faced with a decision on what route to take to resolve your lemon law case, you may have heard that arbitration can be a good way to go. Why would that be? On the face of things, not having to go to court would seem better. Arbitration is more informal and resolution, in many cases, favors the consumer. So, should you jump at the chance to go for arbitration, or take a step back and think again?
A Lemon Law Attorney Can Explain Your Options
A lemon law attorney, from experience, anticipates and faces challenges in multiple settings, arbitration hearings being one. Another is court, and still another (which is always open even while pursuing preparation for a hearing or court case) is settlement. In fact, most lemon law cases do settle. Sometimes, a settlement between the client and the manufacturer cannot be reached, and the lemon law attorney is ready for that possibility. In some states, the consumer is obligated to use the manufacturer’s arbitration program before going to court; in other states, it is voluntary.
Types of Arbitration: Benefits and Risks
Your lemon law lawyer can advise you if you are required to use arbitration as a step in the claim process. If it’s not required, the attorney will tell you what the benefits might be in your situation to pursue arbitration. There are additional complexities, such as if in your purchase paperwork you signed an agreement to use binding arbitration. We’ll discuss that in a moment, along with how manufacturer and state run arbitration programs could impact your case resolution, and your compensation.
Arbitration is Best Approached with the Skill of a Lemon Law Attorney
Your case will have its unique aspects; and arbitration may or may not be an avenue that is pursued in your circumstances. What’s important to remember is that an experienced lemon law attorney has navigated all the forms of arbitration, and also succeeded in settling cases. If applicable and beneficial to you, an attorney can use arbitration to protect your rights.
What is Arbitration for Lemon Law Claims?
As we’ve stated, arbitration is an option consumer can use to resolve their lemon law claims instead of going to court. We touched on state-run and manufacturer programs. Your attorney will discuss with you which options are available to you. Depending on if your state has its own arbitration program, that may take precedence over a manufacturer’s program. Have your attorney explain the options and what the rules are, so you know the potential outcomes, including the types of compensation available to you, including refund, replacement or repair.
Why arbitration – benefits to the consumer
You may have been suffering with a defective car long before you decide to hire a lemon law attorney. It may be that you have had enough of all the trouble the vehicle has caused you, and you want the fastest way to compensation that you can find. That’s what makes arbitration appealing to consumers.
Arbitration – how it may benefit the manufacturer
The manufacturer isn’t interested in a court trial. The publicity, costs and lengthy process isn’t what they want. They would rather wrap up the case by either getting it dismissed, reduced, or if it is decided in the consumer’s favor, taken care of as soon as possible with the least amount of trouble, and perhaps a reduced amount of compensation (maybe only a repair or partial refund).
Are you wondering if arbitration is the way to pursue your lemon law claim? Contact Allen Stewart, P.C. (866-440-2460) for your free case evaluation.
Three Arbitration Examples
It can be helpful to see how arbitration could play out in various lemon law situations. These are three examples, and there are many other potential variables. In these and all case scenarios, your rights are best protected by a lemon law attorney.
Example 1: State Arbitration Program
A woman bought a new truck that developed a persistent, intermittent malfunction of the audio/display screen system. Since the backup camera, hands-free phone, and navigation were randomly inoperable, this defect was a threat to safety and usability, too. The dealer attempted four repairs with no success.
The consumer’s lemon law attorney pursued the claim by presenting all the client’s records: repair orders, a log of dates and times the screen malfunctioned (including photos/videos), and written correspondence with the manufacturer. The attorney showed that the vehicle was a lemon because of its recurring electrical defect that persisted and was unfixable.
There are multiple potential outcomes:
- State arbitration decisions in some cases can be legally binding on both parties.
- If the arbitrator rules in the client’s favor, the manufacturer can be legally required to provide a full refund (buyback) or a comparable replacement vehicle. The manufacturer must comply within a specified timeframe (often 40 days).
- If the arbitrator rules against the client, the decision is typically binding, but the attorney can sometimes appeal the decision to a higher court. These are usually very narrow opportunities, such as for fraud or wrongdoing.
A lemon law attorney will review the state arbitration program’s rules, as in some states, you can appeal, but you also run the risk of getting perhaps an unfavorable decision, or perhaps paying the other side’s costs.
Example 2: Manufacturer’s Arbitration Program
A man’s new sedan had a severe transmission issue; it slipped gears and hesitated during acceleration, posing a safety risk. The dealership had the car in the repair shop for over 30 days for this issue, claiming a critical part was on “national backorder”.
The vehicle owner’s lemon law lawyer used repair invoices, service bulletins related to the transmission problem, and a timeline of the days the car was out of service to show that the vehicle met the “out of service” time requirement under the state’s lemon law. The attorney used the manufacturer’s own internal communications about the backordered parts to prove that the issue was ongoing and unresolved.
Potential outcomes can include:
- Manufacturer-sponsored arbitration rulings are typically non-binding on the consumer (unless the consumer accepts the outcome). The manufacturer is often bound by its own program’s decision.
- If the arbitrator rules for the vehicle owner, the consumer can accept the decision for a buyback or replacement.
- If the decision is unfavorable, the consumer can turn it down and pursue a formal lawsuit in court.
Should the case go to court, then arbitration did provide some benefits, because it helped in evidence gathering and gave insight into the manufacturer’s defense.
Example 3 – Attorney May be Able to Contest Binding Arbitration Clauses
What happens if, in a consumer’s vehicle purchase contract, there was a clause where it said that they would have to be subject to binding arbitration? Could a lemon law attorney help, in this instance? Yes, it is possible, as per this example:
A client purchased a new SUV and within a few months, it developed recurring, unfixable engine issues. A lemon law attorney determined that the vehicle qualified as a lemon under state law. A potential sticking point cropped up, as the purchase contract included a mandatory, binding arbitration clause. While not always possible, a skilled lemon law attorney may succeed in challenging these clauses.
The lawyer reviewed the contract’s fine print. They found that the binding arbitration clause was “unconscionable” (hard to understand or otherwise convoluted or unfair) because it was buried in dense text the client couldn’t realistically negotiate. The arbitration clause’s enforceability was challenged by the lawyer in court; that the waiver of the client’s rights should not be enforceable. A judge agreed with the lawyer’s reasoning, nullifying the arbitration requirement. The client could then bypass the binding arbitration process and pursue their lemon law claim in a civil court with the right to a full jury trial.
Please note: It can be challenging to get a binding arbitration clause overturned. Your best opportunity to do so lies with a skilled lemon law attorney. Contact Allen Stewart, P.C. (866-440-2460) for your free case evaluation.
Why You Need a Lemon Law Lawyer
So, should you settle, sue, or go for arbitration of your claim? Through all our examples, we’ve seen how a lemon law lawyer can protect your rights should you either choose arbitration for your case, or be required to use it. While arbitration can potentially save consumers time and frustration over a court trial, it can also present its own complexities. An experienced lemon law attorney can navigate these issues and place the client in the best position to gain compensation for their defective vehicle.
A key point to remember, as we’ve mentioned, is that a negotiated settlement is the typical resolution in lemon law cases. Even if you decide to go with arbitration of your claim, your attorney and the manufacturer are free at any time to negotiate a resolution before the arbitrator issues a decision. Your attorney will focus on all avenues that give you the potential for maximum compensation.
Contact Allen Stewart, P.C. for Expert Lemon Law Representation
Allen Stewart, P.C. provides expert representation in all aspects of lemon law, from negotiation, arbitration and representing clients in court. Our goal is to hold the manufacturer accountable so you receive maximum compensation for your defective vehicle. If you choose or are required to use arbitration, our attorneys offer the experience and expertise to protect your rights.
You may ask, “Do I really need a lawyer?” It’s a fact that the manufacturer will bring its legal team to bear to protect its interests. You need the top lemon law attorneys at Allen Stewart, P.C., to hold the manufacturer accountable. Plus, since the manufacturer is required by state and federal law to pay your legal fees when you win, you won’t have to worry about affording a lawyer.
Time is of the essence with lemon law claims. Contact Allen Stewart, P.C. now (866-440-2460) to schedule your free case review. Present your evidence to our attorneys, and should your claim be valid, we will discuss how we can move forward to pursue your case. Call us now or contact us online to schedule your free case evaluation.