Lemon Law for California

CA Car dealers have arbitration clauses included in their sales contracts that preclude buyers from going to court. The National Arbitration Forum (NAF) and the arbitrator’s findings are binding. All disputes are channeled to arbitration forums. In case the consumer loses, he or she will not be able reject the award and go to court. This does not concern such organizations as the Better Business Bureau, providing  arbitration in lemon law cases. In this case if the consumer does not like the results, he or she may still file a lawsuit. In this case the consumer can hire a lawyer and his case will be heard by a jury.

The consumers, signing the contracts with binding arbitration clauses, are foregoing their right to a jury trial is bad enough. Arbitration forums as NAF are, to put it mildly, unfair to consumers. These forums are required to information on who wins these proceedings. Public Citizen nonprofit group analyzed the NAF data and found that California consumers lost 94% of 19,000 cases! One arbitrator handled 68 cases in one day. There is no in-person hearing. Arbitrators who rule for consumers are soon dropped by NAF.

Other arbitration forums such as the American Arbitration Association are almost as bad for consumers as NAF. Taking a dispute to AAA is quite expensive (especially when it comes to paying the arbitrator). The arbitrators favor the big corporations knowing they won’t be chosen for future arbitrations (more fees) if they rule for the consumers.

The car dealers want no part of arbitration when it comes to fighting with the manufacturers over their franchise rights. The dealers succeeded in getting Congress to enact a law banning binding arbitration clauses in the dealers’ sales and service contracts with the auto manufacturers!

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