The Role of Arbitration in Lemon Law Disputes

The Role of Arbitration in Lemon Law Disputes

Lemon laws in California are laws that require vehicle manufacturers to replace or repurchase a vehicle when, after repeated repair attempts, it is unable to meet the original warranty specifications. These laws only apply to vehicles purchased or leased with the original warranty still covering the vehicle. They protect consumers from faulty manufacturing or designs resulting in a car that repeatedly fails to work properly or safely. Below, we will familiarize you with how arbitration works in California and how an attorney’s assistance can help with arbitrating and fulfilling lemon law claims.

Understanding Lemon Law Arbitration in California

Arbitration is an agreement to work together with the manufacturer and a third party to resolve the situation in a manner agreeable to both the consumer and the manufacturer. Vehicle manufacturers may include a clause in their purchase contracts that requires arbitrating disputes before the purchaser can bring a case to court. Still, arbitration is also an option that purchasers may enter into voluntarily if they so choose.

Arbitration and courtroom litigation both result in a binding outcome for both parties, albeit with different steps and circumstances. Arbitrating relies primarily on speaking to an individual, while litigation requires written documentation and evidence that must be presented to a judge and potentially to a jury. 

Arbitration is difficult to appeal if the consumer does not like the result, and, as the manufacturers often pay for arbitrators, they may be biased against the consumer. Courtroom litigation, while expensive for the consumer, relies on the neutral third party of the Court to determine the outcome, which may be appealed at least once if the consumer feels as though they have been treated unfairly by the Court.

Arbitration, however, is typically much swifter than litigation, averaging less than forty days from initiation to resolution. In contrast, litigation can take a year or more, depending on the speed of the Court. Arbitrated claims also have regulated time frames that are governed by the California Department of Consumer Affairs, which can compel the manufacturer to comply with specific deadlines. Arbitration does not cost the purchaser money unless they retain legal counsel for the process. 

Finally, legal proceedings are public documents, searchable by anyone. Meanwhile, arbitrated decisions are confidential, require far fewer pieces of evidence to be gathered and logged, and take significantly less time away from family and workplaces than the steps involved in litigation.

The Arbitration Process Explained

If a consumer has a vehicle that is still under the manufacturer’s warranty, has repeatedly required repairs, and cannot be brought to a safe and functional state, they might consider arbitration to get a replacement or restitution for the purchase price. 

Arbitration begins by determining whether the manufacturer has specified a particular dispute resolution method or not. If they have not and the purchaser wishes to pursue arbitration, they can find it via the California Department of Consumer Affairs. Once it has been selected, the consumer should obtain a copy of the arbitration packet that includes the application form.

The purchaser should ensure that they have copies of their original warranty, documentation of all the repairs that have been attempted on the vehicle, and inspection reports. Copies should be submitted with the application – keep the originals. 

Once the application has been submitted, the manufacturer will typically request that the vehicle be inspected at a dealership or a mechanic of their choice. The results of the inspection will be communicated to the consumer and the manufacturer.

At the hearing, the purchaser and the manufacturer will both have the opportunity to present their evidence and documentation to the arbitrator; they will also be able to make statements about the vehicle and the situation at hand. The arbitrator will listen to both parties and consider the evidence before making a decision, which may only bind the manufacturer, depending on whether the arbitration is mandated by the purchase contract or not.

Both parties can argue with the arbitrator if they so desire if they feel that the decision being made is unfair or otherwise not something they can tolerate in their situation. Still, in general, the arbitrator does have the authority to mandate that both the consumer and the manufacturer comply with the decision.

If the results of the arbitration are not favorable to the purchaser – if they are ordered to permit another repair attempt or the decision of the arbitrator is that the vehicle is not a lemon – they do still have options. They may choose to allow the decision to stand and comply with another repair attempt, which may or may not work. They may decide to pursue litigation, which often results in a favorable outcome, although the results can be used against the consumer during litigation. They can also choose to attempt to sell the vehicle and try to put the situation behind them.

The Role of Attorneys in Arbitrating Lemon Claims

Arbitration can be a confusing process, even without the heightened emotions that often result from having to attempt to repair a malfunctioning vehicle repeatedly. An attorney can help the purchaser navigate through the process, from determining whether arbitration is appropriate to gathering the documentation and evidence necessary to present to the arbitrator to appealing the decision if the results are not acceptable. 

An attorney can ensure that all of the necessary information is presented to the arbitrator in a way that is clear and easily understandable while not straying into sensationalized or over-emotional language, which is unlikely to be tolerated by an arbitrator. When the arbitrator makes a decision, the attorney can make arguments on behalf of the consumer to potentially get a more favorable outcome.

Once the decision has been made, the attorney can advise the purchaser on their next steps, whether that be complying with the order, appealing it, or beginning courtroom litigation, depending on the desires of the consumer and the nature of any arbitration clauses that might apply.

Get Experienced Legal Help for Lemon Claim Arbitration

Arbitration can be an important step in resolving a Lemon Law Dispute, especially for individuals without the financial or time resources to deal with a lengthy court case. Experienced legal counsel, such as Johnson & Buxton – The Lemon Law Guys, can assist in ensuring the optimal outcome while protecting the consumer’s rights under the California legal system. 

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