Lemon Law Articles

Arbitration: What is it? Do I have to use it? And, should I get a lawyer?

Arbitration is one of numerous "Alternative Dispute Resolution" ("ADR") procedures. Some other ADR procedures are mediation, conciliation, and early neutral evaluation. ADRs — like arbitration — provide a way of settling disputes outside of the courtroom. Generally speaking, arbitration is an informal trial involving no discovery and simplified rules of evidence. As applied to Lemon Law cases, arbitration is a process in which a supposedly impartial panel of arbitrators listens to presentations made by the consumer and the manufacturer about the consumer's motor vehicle, and then issues a decision in hopes of settling the dispute. Generally, manufacturers are bound by decisions made by arbitration panels. On the other hand, if you are not happy with the arbitration panel's decision, you may proceed to file a lawsuit. ¹

If your motor vehicle manufacturer has established a "state certified" arbitration program, most state Lemon Laws require you to follow that arbitration program before filing suit against your manufacturer. These arbitration programs receive consumers' complaints and try to resolve those complaints outside of the court system. If your manufacturer has set up a certified arbitration program, then your case may have to proceed through that program before you are able to file a lawsuit. However, not all manufacturers have certified arbitration programs, and many motor vehicles are ineligible for arbitration due to a variety of reasons, such as the motor vehicle's age or mileage or, in some cases, the arbitration program's rules disqualify certain motor vehicles. In those situations, you may file a lawsuit without first going through arbitration.

In you are required to go to arbitration, no magic rule requires that you must first hire a lawyer. However, there are a few very good reasons for doing so. First, arbitration rules often vary from program to program and, in many cases, do not follow ordinary court rules. A competent lawyer can help guide you through the process. Second, having a law firm's letterhead on your file can only give you more credibility in the eyes of the arbitration panel and, more importantly, the manufacturer. Third, all evidence presented at the arbitration may be used in any subsequent hearing, and, accordingly, may adversely affect any future lawsuit. Finally, and most importantly, many lawyers (including Macey & Aleman) handle Lemon Law cases on a contingency basis — meaning you do not have to pay extra legal fees by having a lawyer during the arbitration process.

Arbitration can be a tricky procedure, one that often seems to favor the company that manufactured your lemon. If you have any questions regarding your manufacturer's arbitration program or whether you are required to participate in that program, please contact us via e-mail or toll free at 1 (866) LEMON-01. We are here to help you.

¹ For specific information about your motor vehicle manufacturer's arbitration program, look in the warranty booklet that came with your motor vehicle.