Lemon Law: Arbitration

Arbitration is a rigged game. It is run by the manufacturers, for the manufacturers. They typically pay a nominally independent company to administer the program. That company is totally and completely dependent on the auto company for its existence. Some of the companies were created by the automobile industry solely for this purpose. The anti consumer bias is built in. Every dime they receive comes from the industry.

Most people think they are getting into a process that will be fast and fair. It will certainly be fast. It is questionable how fair it will be. One of the supposedly independent arbitration companies has created a subsidiary which performs various services for hire to its manufacturer clients. They don't tell you that when you are applying for arbitration. The subsidiary has offices on the same floor as the arbitration entity. That subsidiary has threatened to sue consumers with lemon vehicles.

Here are some good reasons why not to go through arbitration.

1. In California you don’t have to. The companies don’t tell you that when you call. Check with a lawyer in your state. Some states require arbitration before pursuing your case.

2. The arbitrators are selected by the companies. The companies don’t tell you that when you call.

3. If the arbitrators receive any training in the Lemon Law, it comes from the companies.

4. If the arbitrator decides the case against you, and you pursue your case in court, the company will introduce the decision of the arbitrator in evidence against you. You will never get a chance to ask the arbitrator why he or she decided against you. You will never get a chance to ask why there was no independent third party mechanical inspection. They will never permit you to take the deposition of the arbitrator to find out if he or she is even qualified to be an arbitrator. They don’t tell you that on the phone when you call.

5. You will face industry professionals who have done dozens, in some cases hundreds of arbitrations. These "professionals" are there to win. They will not advise you of your rights. They will not assist you with the law. You will have no legal representation in the process.

Some companies have extraordinary win ratios against consumers. One manufacturer wins 86% of its arbitrations. I learned that an "arbitrator" used by another manufacturer has done (according to the company that runs the arbitration process) "hundreds of arbitrations for manufacturers". I inquired further and learned that he decides 90% of the cases for the manufacturers. Small wonder that they like him and go back to him often.

In short, don’t do it. They are there to win. They win when you lose. These arbitration processes have only the patina of fairness. Arbitration in general favors business. Giving up the right to have your case heard by members of your community is a dangerous thing. Putting your fate in the hands of a group of individuals dependent on the industry for their very existence, if you don't have to, is just plain silly.

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