Consumers Use Arbitration to Settle Lemon Law Disputes

​Ohio's lemon law was enacted to protect consumers against manufacturer defects when they purchase or lease a new motor vehicle. This law requires manufacturers, under certain circumstances, to replace or buy back a vehicle with a defect that substantially impairs its use, value or safety, and that cannot be or has not been properly repaired or repaired in a timely manner. The motor vehicles that are covered under the lemon law are:  passenger cars, motorcycles, motor homes (engine and chassis only) and "light" trucks (trucks that can carry no more than one ton and are not used for business).  These vehicles are protected under the lemon law in the first year or 18,000 miles of operation, whichever occurs first.  If neither the dealer nor the manufacturer representative is able to repair the defects, you may have a "lemon."  But, before you file a lawsuit, arbitration is another way to resolve your dispute, and, in some cases, arbitration is mandatory.

Q: How can I use arbitration to settle my dispute with the auto manufacturer?
A: Arbitration is an informal method of quickly resolving a variety of disputes, and can be used by consumers to settle disputes with auto manufacturers. During the arbitration process, you will present your case to one or more arbitrators who will also hear from the manufacturer. You may make your presentation in person, by telephone conference call, or in writing--whichever is the most comfortable for you.

Q: How long does the arbitration process take?
A: In most cases, a decision is made within 40 days after the consumer's application for arbitration has been received by the arbitration board.

Q: How much does the arbitration process cost?
A: It is free to consumers.

Q: Who pays for the arbitration program?
A: The arbitration programs are paid for by the manufacturers. For them, whether they win or lose, it is a less expensive process than defending lemon law cases in court. The arbitrators are not, however, employed by the manufacturers. They are volunteers who are recruited  and trained by the Better Business Bureau and who donate their time to assist in resolving these disputes.

Q: Do I have to go through arbitration?
A: If your vehicle was manufactured by the Ford Motor Company, General Motors, Volkswagen/Audi, Isuzu, Hyundai, Kia, Lexus, Workhorse Custom Chassis, Porsche, Toyota, Honda or Mazda, you must go through arbitration before you can file a lawsuit under the lemon law. This is because the arbitration programs sponsored by these manufacturers have been certified by the Attorney General as meeting national and state standards for fairness. If your vehicle was manufactured by another manufacturer, you may, but are not required to, submit your case to arbitration before you file a lawsuit under Ohio's lemon law. Consumers should review their warranty books to see whether the manufacturer has indicated that participation in its informal dispute resolution process is required before filing a lawsuit, regardless of whether it has been approved by the Attorney General.

Q: Do I need a lawyer for the arbitration process?
A: The choice is yours. Arbitration is designed to be a quick and cost-free method to resolve warranty disputes. The process and procedures are very informal. Many consumers successfully present their cases without the assistance of an attorney. Some consumers may feel nervous in unusual circumstances, or may have some difficulty in communicating. These consumers may benefit from the assistance of an attorney.

Q: What happens if I win my case in arbitration?
A: The manufacturers have agreed ahead of time to comply with the arbitration board’s decision. The arbitration boards are empowered to award a wide range of remedies. Under any arbitration program certified by the attorney general, no mileage offset for prior use of the vehicle is permitted. If you win your arbitration, you can expect to be contacted by a representative of the manufacturer; the manufacturer must comply with the decision of the arbitration board within 30 days.

Q: What happens if I lose in arbitration, or if I am dissatisfied with the remedy awarded by the arbitrator?
A: An arbitration board’s decision is binding on the manufacturer, but not on consumer unless the consumer wishes to accept it. If you lose in arbitration or are dissatisfied with the remedy awarded you, the lemon law gives you the right to file a lawsuit. If you win your lawsuit, the manufacturer will be ordered by the court to replace or re-purchase your vehicle, and may include an award of attorney's fees and court costs.

Q: How can I find out more about arbitration and other consumer-related issues?
A: For further information or to file a consumer complaint, you may either write to the Ohio Attorney General, Consumer Protection, 30 East Broad Street, 14th Floor, Columbus, Ohio 43215-3428, or email www.OhioAttorneyGeneral.gov​, or call the toll-free Help Line at (800) 282-0515. You can also contact one of the following arbitration boards:
1)  National Center for Dispute Settlement (NCDS) - (800) 777-8119 - handles arbitrations for Toyota, Porsche, Lexus and Mitsubishi products;
2) Better Business Bureau (BBB AUTO LINE) - (800) 955-5100 - handles arbitrations for General Motors, Ford, Volkswagen, Kia and many other manufacturers’ products. 
    
4/11/2016​

This "Law You Can Use" consumer legal information column was provided by the Ohio State Bar Association. It was prepared in conjunction with the office of the Ohio Attorney General.

Articles appearing in this column are intended to provide broad, general information about the law. This article is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney.

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