“Loser Pays” and Its Impact on Lemon Law Claims

Posted by Sergei Lemberg, Esq. on September 10th, 2008

Every state has a Lemon Law, which requires a manufacturer to give you a refund or a replacement vehicle if they can’t fix a new car’s defect within a certain number of attempts. As we all know, car manufacturers will try to do whatever they can to get out of compensating a consumer who has a lemon. So, when a manufacturer refuses, it’s up to the consumer to file a Lemon Law claim.

A number of states require that the consumer enter an arbitration program run by either the manufacturer or the state. The rationale is that, if the two parties’ differences can be smoothed out, it won’t burden the court system. In practice, however, car manufacturers have legal teams that fight Lemon Law claims – whether in arbitration or in the court system. It’s much more likely that consumers will have positive outcomes and get the compensation they deserve when they hire a Lemon Law attorney. This is because most state laws say that, if the consumer wins the case, the manufacturer has to pay the consumer’s attorney’s fees. Therefore, manufacturers need to weigh the cost of fighting the claim (that is, the cost of their legal team plus the consumer’s lawyer) against agreeing to a buyback or replacement vehicle. If the consumer has a lawyer and a good case, chances are that the manufacturer will back down and pay up.

England and many other European countries have what’s termed a “loser pays” policy, whereby whomever is on the losing side of a legal action has to pay the legal fees of the prevailing party. While this might seem fair on the face of it, loser pays undermines the foundation of Lemon Laws and other laws that include what’s termed “fee-shifting.” Think about it. The average consumer simply doesn’t have the resources to risk filing a Lemon Law claim and having to pay GM’s or Chrysler’s legal bills. No one in their right mind would take a car manufacturer to court – even if they had a solid case.

Lemon Laws certainly don’t provide consumers with an unfair advantage; if anything, they make it difficult to get relief by imposing stringent requirements on consumers. Awarding attorneys’ fees in a successful Lemon Law claim puts the onus where it belongs: squarely on the shoulders of the car manufacturer who made and sold a defective product.

It goes without saying, however, that there are two sides to every story. Jonathan B. Wilson, a corporate attorney and blogger, has a very different perspective. He’s the author of “Out of Balance: Prescriptions for Reforming the American Litigation System.” For those who are on the side of consumers, his prescription is a bitter pill that’s hard to swallow. In a nutshell, he thinks that attorney’s fees are causing the legal system to run amok, and proposes reforms that would make it harder for wronged consumers to fight back.

The problem with Jonathan’s position is twofold. First, consumers are regularly abused by big car companies, who have bottomless pockets with which to fight claims against them. Second, because Lemon Law claims result in relatively low dollar amount settlements (thousands of dollars instead of hundreds of thousands or millions of dollars) it’s impossible for attorneys to bring cases without also being awarded fees.

Tire Danger: Stale Tires Could be Hazardous

Posted by Sergei Lemberg, Esq. on August 18th, 2008

Over at The Lemon Law Blog, attorney Mark Anderson highlighted a problem that most Americans are unaware of: It could be dangerous to buy new tires that are more than six years old. A report by the newsmagazine 20/20 dove into the issue, finding that stores – even the big box retailers – can let new tires site on the shelves for years.  Apparently, even if tires have never been used, after six years they begin to dry out and have a greater likelihood that the tread will peel off the tire. When that happens, a vehicle can swerve violently and crash.

The thing is, even if a tire looks fine on the outside and has a lot of tread depth, hidden problems can be lurking inside. According to 20/20, Ford has requested that the U.S. government adopt a regulation that requires a six-year expiration date for tires. The Rubber Manufacturers Association has fought such a move, and the government hasn’t taken action.

When shopping for new tires, how can you tell when they were manufactured? Look for a code on the side of the tire that starts with DOT. Go to the end of the string of numbers and look for a (hopefully) four-digit number. The number 4202, for example, means that the tire was manufactured in the 42nd week of 2002. A three-digit number indicates that the tire was made in the 1990s. So, the number 414 means that the tire was manufactured in the 41st week of 1994.

If you want to see when the tires currently on your car were manufactured, you’ll probably have to crawl underneath and look for the code on the side of the tire facing inward. Given that there have are many fatalities due to tire failures, it’s probably best to play it safe.

Cars! Cars! Cars! Info that Bites

Posted by Sergei Lemberg, Esq. on August 1st, 2008

Cars! Cars! Cars! describes itself as “A Car Blog. Only Angrier.” But it’s angry in a humorous way. The blog’s short entries provide commentary about car-related stories in the news and in the blogosphere. Its tone is straight and to the point, injected with a bite of the absurd. Whether it’s talking about the most dangerous roads in the world, cars that run on compressed air, or leased SUVs, Cars! Cars! Cars! is the perfect place to pick up relevant and irreverent tidbits of information – and a great starting point for finding other car-related stories and posts on the Web.

CT Lawyer Ryan McKeen Entertains and Informs

Posted by Sergei Lemberg, Esq. on July 21st, 2008

I live in and practice Lemon Law in Connecticut, so I’m always interested in hearing the musings of other attorneys in Connecticut. Attorney Ryan McKeen, who is at the firm Leone, Throwe, Teller & Nagle in East Hartford, has a great blog, “A Connecticut Law Blog,” that he describes as, “Thoughts on Connecticut Law with a Side of Baseball.”

Ryan discusses his thoughts and reactions to news about virtually every type of Connecticut civil law – from family law and child support to evictions and small business. His recent posts cover topics ranging from the inclusion of pets in your will to Connecticut’s foreclosure mediation program.

The best thing about Ryan’s blog is that it provides truly useful and accessible information to Connecticut consumers. It’s kind of a one-stop shop for people who want to keep tabs on the ways laws impact our lives. Plus, his humor and his love of the Red Sox add an entertaining dimension to the topics he covers.

Keep up the great work, Ryan!

Is the Prius the First Hybrid Lemon Car?

Posted by Sergei Lemberg, Esq. on June 23rd, 2008

Joel over at The Car Blog notes that Toyota has sold over 1 million of their gas/electric hybrid Prius model. Toyota estimates that the Prius has saved about 4.5 million tons of CO2 emissions (as compared to comparable gas-powered vehicles). 

Joel, the Prius may be helping the environment but some Prius owners are sitting out on the sidelines. Complaints filed by consumers with the National Highway Transportation Safety Administration indicate that owners of the 2008 Prius have had problems ranging from the minor (interior lighting issues) to the potentially fatal (airbags not deploying). We, too, have gotten our share of Prius calls.

So while Toyota is indisputably helping the environment and consumers’ pocket books, one can’t help but take a wait and see approach on whether its technology is reliable in the long term.