When a consumer is faced with the proposition of going to lemon law arbitration with a manufacturer over their lemon vehicle, the question looms, should I do it?

Most consumers think by so doing they are going to a neutral forum where justice will be served. However what they don’t know is that the manufacturer pays for this service, and arbitrations are a majority of the time in favor of the manufacturer. All too often a consumer is “awarded” additional repairs to the defect they have already given the manufacturer a reasonable opportunity to repair. Ironically, this is no award at all because typically the consumer still has warranty coverage, or if the general warranty expired, the warranty as to the defect they failed to repair (at least in California) is extended for the defect the manufacturer failed to repair during the existence of the warranty. In the few instances where an award is made, many times it is not in accordance with the laws i.e. it may look like a “lemon law buyback” but the consumer is shorted the complete remedy the law allows.

Why bother going to a forum that is more often than not biased in favor of the manufacturer? Why put yourself through the frustration of having your case fall on deaf ears? Most people would like to give the benefit of the doubt to a process like this. It sounds appealing; it avoids lawyers and the court. But the truth of the matter is, you’d be better off not going through this process (unless it is required in your state; it is not required in California) and retaining a lemon law attorney to help you. Many times cases can be resolved without going to court. Many attorneys will represent the consumer at no cost.

Don’t fall prey to this pretentious trap. Bypass any offers to go to arbitration and get a lemon law attorney today!

Will General Motors File Bankruptcy? What will happen to the millions of consumers with GM warranties? Will they have recourse under the lemon law? It all may come down to whether or not GM files for Chapter 11.

Americans are waiting with baited breath to see if General Motors will file for Chapter 11 Bankruptcy on June 1, 2009, or whether their efforts to reorganize on their own can stave off the prospect of doing so. On May 21, 2009 GM reported it had reached a tentative agreement with the United Auto Workers to modify its labor contract with GM, removing a major hurdle to GM’s government-mandated restructuring. Reducing union costs are crucial for GM as it tries to shrink its debt before the restructuring deadline. To avoid bankruptcy, GM and Obama’s Auto Task Force still must reach a deal with bondholders to significantly reduce the $27 billion in debt securities owed. GM must convince its lenders (bondholders) to forgive about 90 percent of the company’s debt. GM is currently being kept afloat by $15.4 billion in government loans. Can GM make it before the June 1 deadline? Will the bondholders force GM into bankruptcy? Those are billion dollar questions. This week we should know the answer.

The “lemon law community” is still waiting to see just how the Chrysler bankruptcy is going to affect lemon law claims. There are consumers who have a legitimate lemon law claim who haven’t filed yet. There are those who have filed lemon law claims and are mid cycle, and finally those who resolved their lemon law claims and haven’t been paid.

It is wise to hold on to claims that haven’t been made yet so as not to be swept into the bankruptcy mess. By all accounts the bankruptcy process is supposed to be fast, and Fiat has a purchase agreement in place to buy Chrysler and among other things will assume specified liabilities including “certain liabilities for product warranties, product returns and rebates…”

There is a big question whether claims that are mid-stream can be resumed with the “New Chrysler.” The language of the proposed sale is ambiguous in this regard.

Just what the purchase agreement between Fiat and Chrysler means in the lemon law context remains to be seen. I think it is safe to assume that the “New Chrysler” will continue to honor Chrysler warranty claims for the driver who goes to the dealer but, one would argue that after a reasonable opportunity to repair defects, that one should be entitled to invoke the lemon law and seek a replacement or refund. The “New Chrysler” cannot have an infinite number of repair attempts while “honoring their warranty.” After all, that is what the lemon law is all about. There comes a time when enough is enough, right?

As for those who have returned their vehicle and got a bounced check in return, hope is on the horizon. There has been a lot of publicity about bounced refund checks from Chrysler, the Los Angeles Times recently wrote an article describing this fiasco. If the “New Chrysler” intends to honor its warranties, they had better honor the lemon law buy back too. They go hand in hand.