An alarming report in the New York Times highlights the ways in which automakers are trying to sidestep or dilute consumer protections when it comes to defective cars. According to the article, car manufacturers are trying to make consumers waive their lemon law and class action rights and instead agree to undergo binding arbitration.
When consumers face binding arbitration, they’re subjected to rules instituted by the manufacturer’s arbitration firm. The Times quoted a law professor as saying, “So one of the main benefits from the company’s standpoint is to eliminate claims against the company.” Another benefit is to cover up defects that could become public over the course of a lemon lawsuit in the court system.
Consumers are at a distinct disadvantage when it comes to arbitration proceedings. Car manufacturers have teams of legal experts who focus on tamping down consumer claims, while consumers generally don’t have the expertise or the financial resources to hire attorneys that will go toe-to-toe with automakers. Without the consumer protections and fee-shifting provisions of state lemon laws, consumers are at the mercy of car manufacturers.