Connecticut’s Lemon Law Arbitration Program Examined

Posted by Sergei Lemberg, Esq. on March 7th, 2010

Connecticut’s Lemon Law Arbitration Program

Unlike in many other states, Connecticut residents who have defective cars have the opportunity to enter into a state-run arbitration program rather than simply taking auto manufacturers to court. The problem is that, while on the surface arbitration programs look like a good deal for consumers, many people don’t realize how complicated the process is. Let’s take a look at what’s involved.

First, according to lemon law rules, you need to file a request for arbitration. Your application and filing fee may be accepted or rejected. If your application is accepted, it is next reviewed by an arbitration panel, which consists of an arbitrator and a technical expert. There, it may again be accepted or rejected.

For many people, even filling out the application form can be confusing. For example, you need to choose between what’s called a “documentary hearing” or an “oral hearing.” In a documentary hearing, both you and the auto manufacturer have to turn in sworn statements and other evidence and documentation. The arbitration panel will only consider this written material when deciding your case. This process becomes daunting when you realize that the car manufacturer has a team of legal eagles at its disposal to poke holes in your written argument. It’s a bit like a Sampson and Goliath situation.

The same is really true for an oral hearing. As the name implies, you get to make your case verbally before the arbitration panel. But that doesn’t mean that you’re off the hook for written documentation. Indeed, you have to bring all sorts of written material to an oral hearing, including warranties, correspondence, work orders, and so forth. You’ll need to communicate all the conversations you’ve had with the dealer or manufacturer, have a list of questions to ask the manufacturer’s representatives, and prepare a closing argument.

That’s why it makes sense to have a lemon law attorney by your side. Most consumers aren’t Perry Mason, and shouldn’t be expected to go toe-to-toe with a carmaker’s legal team. A good lemon lawyer, like those at LemonJustice.com, is experienced in litigation and can prepare a case that will pave the way for a lemon buyback. Plus, at attorney can give you sound lemon law advice so that you have a strong case when going into arbitration. Alternately, he can approach the automaker directly, and reach a settlement without ever having to enter state-run arbitration.

Lemon Law Rules: Connecticut’s Arbitration Program

Posted by Sergei Lemberg, Esq. on March 7th, 2010

Connecticut’s Arbitration Program

According to many states’  lemon laws, having a defective car means taking an automobile manufacturer to court. But in CT, lemon law rules provide for what’s known as an arbitration program. Administered by the Department of Consumer Protection, the arbitration program decides whether or not your vehicle meets the criteria of Connecticut lemon laws, and whether you’re eligible for arbitration. Ultimately, the arbitration program decides whether or not you’re eligible for a lemon buyback.

In order to take advantage of the state’s arbitration program, you need to file an application and documents, as well as pay a fee. First, the Department of Consumer Protection will review your application and determine whether or not you’re eligible for arbitration. If so, your application goes on to an arbitrator and an automotive technical expert. These two people will also review your application, and can determine that you’re ineligible for arbitration – even if the Department of Consumer Protection said that you are.

While Connecticut lemon law supposedly designed the lemon law arbitration process so that consumers don’t have to hire an attorney, the reality is that it’s a very complex and intimidating process. It doesn’t help that auto manufacturers show up for arbitration with or submit documents from teams of attorneys who do nothing but fight lemon law claims. One slip-up by the consumer – either in terms of the paperwork filed or in not countering the arguments of the manufacturer’s legal team, and the idea of justice is out the window.

Whether you live in Connecticut –  or any other state with an arbitration program – it’s important to have an attorney by your side. The right lawyer can give you lemon law advice, and can often get you a settlement or a lemon buy back without ever going through the arbitration process. Often, an auto manufacturer will back down because having a lemon law lawyer sends the message that you’re serious about your claim, and that you’re not willing to put up with a defective car.

If you think you have a lemon vehicle, it’s important to contact an attorney early. In lemon law cases, timing is everything. A lemon law lawyer will consult with you and guide you through the process of substantiating your claim, collecting the proper documentation, and bringing the auto manufacturer to justice. 

Arbitration – Good for the Manufacturer, Bad for the Consumer

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

We’re pleased that our friend Donald Ladew from Norman Taylor & Associates is sitting in the guest blogger’s chair today. Thanks, Donald, for this great information about arbitration.

It’s an unfortunate fact that the courts around the country are badly overloaded. The government, which has to fund the court system, loves the idea of arbitration because it saves money and court time. For this reason, lemon laws often include a method for trying to resolve lemon law disputes informally. Quite sensibly, though, the Congress did not deprive consumers of access to the courts. Under Magnuson-Moss (the Federal consumer warranty law), the consumer is not required to accept the result of the informal dispute resolution process. At Norman Taylor & Associates, we are frequently asked about arbitration. We do not recommend it. In California, the consumer may opt out of the arbitration process. Fortunately, many states, New York included, allow the consumer to opt out of the arbitration process.

The problem in any situation requiring arbitration is equality. At the risk of being trite, there ought to be a level playing field.  In California, the legislators who created our excellent Lemon Law understood this. In California the Song-Beverly Act does not require the consumer to go to arbitration once all options that might correct the defective vehicle have been tried.

Manufacturers love arbitration. It’s just another step in the gauntlet of delays and deceptions meant to prevent the consumer’s access to the lemon law. The goal of the manufacturer is to make the consumer give up and go away. Any delay favors the manufacturer, who is not the one driving the defective vehicle. The motive is the oldest of them all…or perhaps the second oldest, money. Worst case for the manufacturer is a refund or a replacement. If the manufacturer has to pay the consumer, that is money the corporation cannot earn income from.

Why is the playing field not level?

  • The individual doesn’t have the resources or time to devote to the arbitration process.
  • The consumer doesn’t have access to legal assistance.
  • The consumer cannot afford to bring experts to the arbitration.
  • The manufacturer can afford the expense, time and travel necessary to attend the arbitration.
  • Consumers are unfamiliar with the law and with the arbitration process. This can lead to awards to the manufacturer even though the facts of the case are relatively clear.
  • Even arbitrators are not always lawyers or are they familiar with the lemon law – probably because they are not required to follow that law when issuing their decisions.

What we see most often at the conclusion of arbitration is the award of another repair attempt to the manufacturer. Two or three months may have passed to accomplish this! The consumer attending the arbitration most often has already tried to get the vehicle repaired four, five, or even six times. This is not resolution; this is a gift to the manufacturer.

If there is going to be any gift giving, let the manufacturer do it; they are the one’s most in need of our good will.

At Norman Taylor & Associates our Attorneys are specialists in California Lemon Law. Our goal at Norman Taylor & Associates is to provide the highest quality legal representation possible.

Norman Taylor, the principal attorney, co-authored the first book on California Lemon Law entitled: Lemon Law – A Manual for Consumers. He recently authored his second book on the lemon law entitled: Lemon Law – The Standard Reference Guide, which enjoys distribution and recognition on a national level. His firms have handled over 6,000 lemon law cases forcing vehicle manufacturers to refund well over $100,000,000 for defective goods to consumers.

Canadian Lemon Law Clarified

Posted by Sergei Lemberg, Esq. on September 27th, 2008

I had the pleasure of guest blogging for the Canadian “Law is Cool” blog, and in my post contrasted Canadian Lemon Law with Lemon Laws in the U.S. (Canada doesn’t have province-specific lemon laws, but instead has the national Canadian Motor Vehicle Arbitration Plan (CAMVAP).

A short time after Law is Cool posted my entry, the General Manager of CAMVAP posted a response. That was quick! His perspective (below) is illuminating, so I thought Lemon Justice readers might be interested in the details of lemon law for our neighbors to the north.  I have no basis to doubt Mr. Moody’s assertions about the fairness of the arbitration process in Canada, but I will say that most arbitration programs run by Attorneys General in the United States lay similar claims which I don’t believe are fully accurate. For instance, as I pointed out on the Lemonjustice blog in March, statistics don’t bear out these arbitration programs’ claims to neutrality.

Just look at the New York Lemon Law Arbitration Program’s statistics available online.  The program screens applications — that is, to be accepted into the arbitration program, a consumer has to document 4 repairs or 30 days out of service for a vehicle, which are the New York Lemon Law requirements.  However, it turns out that only 50% of all cases admitted into the program turn out in favor of a consumer.  In contrast, virtually 100% of cases with 4 repairs/30 out-of-service days in which we represent consumers turn in the consumers’ favor.

How come? Well, there is an easy answer.  In my experience, most manufacturers will vigorously defend cases in arbitration, sending one or two lawyers to each hearing, usually accompanied by the dealer and dealership service representatives.  These folks know the law, know the facts, and can easily out-argue a consumer who shows up on his or her own.

Regardless, this is Mr. Moody’s response. I’m honored that he responded and am glad to be part of the discussion.

Motor Vehicle Lemon Laws in Canada – Mr. Lemberg missed the mark with respect to his analysis of CAMVAP. The program does include awards where the arbitrator orders the manufacturer to buyback the vehicle. The arbitrators can order the manufacturer to buyback the vehicle; repair the vehicle at its expense; reimburse the consumer for repairs that have been paid for by the consumer; and, reimburse the consumer up to $500 for limited out of pocket expenses. Buybacks average about $22,000 with most vehicles that are ordered to be bought back usually being in their 2nd or early 3rd year of operation. One recent and very exceptional buyback was for just over $250,000.

The program covers vehicles that are from the current plus 4 model years old. Up until September 30th of this year, that means vehicles that are 2004 and newer are eligible. After September 30, 2008 program eligibility will be limited to vehicles from the 2005 and newer model years with program eligibility extending to 160,000 kilometers (100,000 miles.) Unlike many U.S. lemon laws CAMVAP covers used vehicles.

The CAMVAP process is free to the consumer. The hearings are held in the consumer’s home community. Manufacturers send district service staff or retired service staff to the hearings. Manufacturers do not send a lawyer. Unlike the U.S. lemon law system in all but a few states, consumers do not need lawyers. The program and its agreement for arbitration are more practical than the lemon laws.

When pre-hearing settlements, consent orders and contested awards are added together, consumers are successful about 70% of the time. Aside from the other awards, 87 vehicles were bought back by the manufacturers for a total value of 2.04 million dollars.

CAMVAP is governed by an independent board of governors that include consumer, government, dealer and manufacturer representation. All of the provinces and territories in Canada are members of CAMVAP and senior representatives from these governments participate in CAMVAP’s overall governance.

Canada’s approach to dispute resolution is considerably different than the U.S. model. The fact that the order is binding on both the consumer and the manufacturer is considered a benefit of the program. The fact that the program is free to consumers makes access available to all consumers that have a dispute with the manufacturer of their vehicle and because the program is Canada-wide, consumers are treated the same no matter their jurisdiction. This is significantly different from the patchwork quilt of lemon laws that exist in the United States. Many states have excellent well administered lemon laws, but in other states the laws are on the books with no funding, staffing or practical availability to the consumer.

For those interested in CAMVAP, please see our website. General consumer information as well as the programs annual reports is available to be viewed and downloaded.

I must disagree with Mr. Lemberg’s bottom line. CAMVAP provides consumers with an excellent program that is fast, fair, free, friendly and final. Canadians have a program that works for consumers and in many ways exceed many of the U.S. models.

Stephen Moody
General Manager
Canadian Motor Vehicle Arbitration Plan

“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.