Lemon Law Arbitration in California Explained

Arbitration process - CA Lemon Law

What is Lemon Law Arbitration in California?

Lemon Law arbitration in California is a legal process provided for in the state’s Lemon Law statute. During arbitration, warranty disputes (compensation claims for lemons or defective vehicles) between an auto manufacturer and a car owner can be settled amicably out of court. Most manufacturers offer state-certified arbitration programs; consumers may file for arbitration at any time during the warranty period and up to 6 months after warranty expiration, according to the California Department of Consumer Affairs.

 

 

How does Arbitration work?

When you submit your claims to arbitration, both you and the manufacturer agree to allow a neutral third party (the arbitrator) to resolve the dispute. The arbitrator’s job is to determine if there have been a reasonable number of repair attempts to fix the vehicle’s defects and what legal relief or compensation is appropriate. The arbitrator has 40 days to review the evidence and make this decision.

 

Is Arbitration required by law?

No. You don’t need to go into arbitration with an auto manufacturer to settle a Lemon Law-related dispute. The Song-Beverly Consumer Warranty Act allows and regulates the arbitration, but consumers who elect not to file for arbitration are not compelled by the law to do so. In fact, you can proceed directly to file a formal complaint. Here are the steps on how to file a Lemon Law claim.

How to Win Lemon Law Arbitration

Winning your lemon law claim through arbitration is much like winning your case before the court. The formalities and requirements may not be as stringent but just like arguing your case in regular litigation, you will have to support your claim with sufficient evidence. In our opinion, there are two key elements you must have to win in a lemon law arbitration process:

COMPETENT LEGAL COUNSEL

First, you will need to retain a competent counsel who knows the ins and outs of the law and who can advise and guide you through the entire process. As explained below, you will shortly find yourself in a grossly disadvantaged position if you choose to move forward with arbitration on your own.

SUFFICENT DOCUMENTARY EVIDENCE

Second, you will need ample evidence to support your claim. In the context of lemon law, documentary evidence is crucial to winning your case. You must be able to provide the arbitrator with proof of your vehicle problems and the inability of the manufaturer or dealership to fix the problem after several repair attempts. For a full list of essential lemon law documents, check out this page: 12 Essential Documents to File a Lemon Law Claim in California.

 

Advantages of Arbitration

Some find arbitration a desirable option as it simplifies and speeds up the warranty dispute process. Here are a few reasons why consumers may choose to participate in the arbitration process:

  • Speedy Decision. The arbitrator(s) has 40 (maximum) days to resolve the case.
  • No Lawyer Required. You do not need to hire an attorney to help you navigate the arbitration process. If you have documented your case and are familiar with the CA Lemon Law, you may feel comfortable advocating for yourself.
  • Non-binding resolution. The arbitrator’s decision is binding for the manufacturer but as a consumer, you are not obligated to agree with the decision. If the proposed settlement is not acceptable, you may still choose to file a court case to pursue your claim.
    Before deciding to go ahead with this process, it might be prudent to consider the following disadvantages of arbitration.

 

 

Disadvantages of Arbitration

While it can be good in theory, in practice, many consumers regret participating in the arbitration process. Here are some reasons why the arbitration process can hurt your lemon law claim:

  • Paid for by the manufacturer. The arbitration process is strictly regulated by the government through a state-certification program; however, it’s possible that the manufacturer may have too much influence over the proceedings, due to their long-term relationship with the arbitrators.
  • No Competent Legal Advice. Many car owners choose to go into arbitration without engaging the services of a skilled lemon law attorney first. This can be a mistake. The manufacturer will have attorneys and legal experts to argue on their behalf, and consumers may find it difficult to navigate the complexities of CA lemon laws when arguing their side of the case.
  • Admissible as Evidence. If you do not agree with the arbitrator’s decision, you have the right to file a lemon law claim in a court of law. However, the arbitration proceedings and decision can be used as evidence against your claim.

Because arbitration can be detrimental to a consumer’s lemon law claim, we advise against proceeding with the arbitration process.

 

Check for Certification

California Lemon Law mandates that manufacturer-sponsored arbitration programs follow strict requirements to ensure fairness and should be state-certified. If you choose to enter into arbitration, ensure the arbitration program has a valid certification by visiting the California Department of Consumer Affairs website at www.dca.ca.gov/acp/ or by calling them at 800-952-5210.

 

What if the manufacturer does not have a state-certified arbitration program?

Some auto manufacturers do not have an in-house arbitration program to speedily settle warranty disputes with consumers. If you find yourself in this situation, your other options include filing a claim in court or continue engaging with the manufacturer to settle your dispute through mediation.

The New Motor Vehicle Board (NMVB) has a program called the Consumer Mediation Services Program, which helps consumers and vehicle manufacturers settle warranty disputes informally. To find out more about this program, please visit the NMVB website or call their office at (916) 445-1888 and ask to speak with a mediator.

Go here for a list of government agencies where you can file a report or complaint about a defective vehicle. For questions about CA lemon laws, please refer to our FAQs page.

 

Get a Good Lawyer

If you’re considering submitting your claim for arbitration, a skilled California Lemon lawyer can advise you about the process, help you prepare essential documents, and provide you with accurate information about your options to obtain the compensation you rightfully deserve.

Call us today at (323) 553-7525 for a free, no-obligation consultation and get a straight, no-nonsense assessment of your case.

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