ARBITRATING CALIFORNIA LEMON LAW CLAIMS IS USUALLY BAD FOR CONSUMERS
After talking to the their lemon automobile’s manufacturer, many California consumers want to know more about “arbitration.” This is because vehicle manufacturers often suggest that lemon car and truck owners should arbitrate their California lemon law claims. Indeed, they have lemon law arbitration programs in many California cities, including Los Angeles, San Francisco, Sacramento, and elsewhere. However, there are many reasons why car owners should be sour on arbitrating California lemon law claims.
What is Arbitration?
Arbitration is similar to a lawsuit in that a person (i.e., the Arbitrator) is appointed (like a court) to determine whether or not the California lemon law’s rules give you a legal right to a lemon law buyback. However, there are some very important difference between arbitration and lawsuits of which Californians need to be aware. The drawbacks of arbitrating California lemon law claims are discussed in greater detail below.
In terms of how the arbitration will be conducted, you and the vehicle manufacturer’s representative typically have an initial meeting (or conference call) with the Arbitrator in which you discuss the statutes and lemon law requirements applicable to your case, you arrange for an exchange information, and then you schedule the arbitration hearing. Then, after preparing, the parties have an arbitration hearing at which they are entitled to present the documents and witnesses that support their side of the case. The formal rules of evidence that typically apply in California lemon law lawsuits do not apply in arbitration, and the Arbitrator can determine which documents and witnesses can be presented at the arbitration hearing. After the hearing, the Arbitrator will issue a decision deciding who wins and who loses, and deciding how much money or other relief the winner is entitled to. The Arbitrator is supposed to abide by the California lemon law’s requirements and rules, but you have limited rights to appeal if he or she does not.
Arbitration may or may not be binding. If it is binding, then the Arbitrator’s decision is final, and (with very limited circumstances) neither side has the right to appeal it or ask a court to review it to make sure that the Arbitrator correctly applied the rules and precedents of the lemon law.
Reasons to Avoid Arbitrating Your California Lemon Law Claim
If you can, there are very good reasons to AVOID arbitrating your California lemon law claim. Although arbitration is supposedly designed to be cheaper and quicker than a California lemon law lawsuit, these benefits help the vehicle manufacturer more than the car buyer, and come at a steep cost to the vehicle owner in terms of fairness.
Arbitrating California Lemon Law Claims Benefits the Manufacturer – Not You!
With regard to the idea that arbitrating California lemon law claims is supposedly “less expensive,” this is not really a benefit to California car buyers at all. Under the California lemon law statute (at California Civil Code Section 1794(d)), the vehicle manufacturer (not the car buyer) has to pay the legal fees, costs, and expenses of a lemon law lawsuit in which the car buyer prevails. As a result, there are dozens of California lemon law attorneys, who practice and take cases in every city in this State, and who are willing to represent consumers in California lemon law lawsuits on a “contingency fee basis.” This means that consumers DON’T have to spend money to hire a California lemon law lawyer because there are plenty of attorneys who specialize in the California lemon law who will be willing to represent you for “no money down” with the understanding that their fee will be paid by the vehicle manufacturer (and not you) only if and when you win. For more information on finding a lemon law attorney, see this site’s page on How to Choose a California Lemon Law Attorney.
With regard to the claim that arbitrating a California lemon law buyback request is supposedly “quicker,” this is misleading and irrelevant. What matters to most Californians in a lemon law claim is not how long a particular legal proceeding takes, but instead how long it takes for the manufacturer to buyback the lemon vehicle. Consumers with strong California lemon law cases can usually obtain lemon law buybacks quicker by hiring a California lemon law attorney and filing suit. The manufacturer will know that its chances or prevailing are slim to none, and will want to resolve the case as soon as possible to minimize the legal fees and costs that it has to pay to both your attorney and its own lemon law lawyers. However, in arbitration, even if you have a strong California lemon law claim, the manufacturer is more likely to contest and drag out your claim because (1) it does not have to worry about paying substantial legal fees, and (2) its chances of winning are much greater in arbitration than in a California lemon law lawsuit.
Arbitrating a California Lemon Law Claim Lowers Your Chance of Winning!
And that brings us to the most important reason to avoid arbitrating your California lemon law claim – you are less likely to win and get the California lemon law buyback that you might otherwise get in a lemon law lawsuit. The primary reason why arbitration is cheaper than California court proceedings is that it permits less “discovery.” Discovery is the process in a lawsuit in which the parties can force the other side (and third-party witnesses) to turn over relevant documents and answer questions under oath about issues relevant to you California lemon law claim. But since YOU are the one who has the burden of proving that you have the right to a California lemon law buyback, having LESS access to information and relevant documents is a bad thing. Consumers in California lemon law cases generally WANT access to as much information as possible so that they can gather evidence to prove their case and their right to a California lemon law buyback.
Another reason why you are less likely to win arbitrating a California lemon law buyback claim is that in arbitration you typically do not have a lawyer. While the vehicle manufacturers will typically try to convince you that you do not need a lawyer and they will not be represented by an attorney at the arbitration hearing, that is entirely misleading. Bear in mind that the vehicle manufacturer’s representative at the arbitration will be a specialist whose entire job is arbitrating lemon law claims, and whose years of experience may result in him or her knowing as much about the California lemon law as some attorneys. Further, even if the manufacturer’s representative at the arbitration is not a lawyer, he or she will be working with and under the guidance of the manufacturer’s numerous attorneys. Thus, in arbitration a consumer is typically at a huge disadvantage in terms of knowledge of the California lemon law’s rules and procedures. If a manufacturer try to tell you that you don’t need an attorney, then I suggest you offer to arbitrate your claim only if they guarantee that the manufacturer’s representative will (like you) be a non-lawyer who has never dealt with a lemon law claim before. See if they are willing to agree to that!
In reality, arbitration is sour fruit for consumers when it comes to the California lemon law, and should be avoided if at all possible.
Call a California Lemon Law Attorney Before You Attempt to Arbitrate Your California Lemon Law Claim
As explained above, if you have a choice it is generally better NOT to attempt to arbitrate your California lemon law claim yourself. Most attorneys who specialize in California’s lemon law offer free consultations. So if you have any doubts or questions about arbitration or the California lemon law’s rules and requirements, you should call to discuss your situation with an expert California lemon law attorney.
The Vachon Law Firm specializes in California lemon law claims, and offers FREE consultations. Call 1-855-4-LEMON-LAW (1-855-453-6665) to discuss your lemon law rights, and to find out whether you are entitled to a lemon law buyback and other monetary compensation!
- Back to California Lemon Law Info Page