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