Arbitration, or “third-party dispute resolution,” is a process that allows the manufacturer’s agent and vehicle owner to “state their case” to an “unbiased” 3rd party, called an “arbitrator,” in an attempt to resolve the consumer’s Lemon Law claim for a repurchase or replacement of the “lemon” vehicle.
First, the requirement for arbitration must be established. Each state has its requirement (or lack thereof) of a consumer’s responsibility to pursue non-binding arbitration. Some states do not require arbitration at all, relieving the consumer of this responsibility.
Some states, like California, have “voluntary” arbitration that is offered by the automobile manufacturer and which is binding on the manufacturer, but not on the consumer. In California, arbitration is optional for the consumer and is not required. It is only indicated in certain circumstances where the consumer wants to exert the “presumption” rule. Otherwise, the consumer is free to consult and hire a Lemon Law attorney for legal representation, and the attorney fees are paid by the vehicle’s manufacturer in California. (This will vary by state)
As with the example of California, each state has specific requirements under that state’s statute that the consumer must fulfill and adhere to in seeking restitution under their state’s Lemon Law.
It is important to note that automobile manufacturers may attempt to “settle” a consumer’s “case” before or during the Arbitration process. Manufacturers may offer to “resolve” the consumers request for repurchase or replacement by offering an alternative like a Service Contract, an Extended Warranty, the return of few monthly car payments, or other “resolutions.” These “resolutions” or “settlements” may be far short of what the state’s Lemon Law would require of the manufacturer. Be careful.
A consumer should consider consulting with a qualified Lemon Law attorney in his/her state prior to, or after attending an Arbitration hearing to be assured that they will/are receiving their full entitlement under their state’s Lemon Law, and not something far short of it.
Arbitration
