Is Arbitration Required In Lemon Law Cases?

Is Arbitration Required In Lemon Law Cases?

There are few things more frustrating than buying a car (be it new or used) and finding that it needs to go into the shop multiple times in the first months or year after purchase. If you purchase a car that does not meet the expected standards of the vehicle, especially on a repeated basis, you may be eligible to file a complaint under what is called the “lemon law.” Essentially, the lemon law is a legal recourse for you to receive compensation for a “lemon” (a poor-performing vehicle that has issues not disclosed to you when you purchased it).

When you are faced with a vehicle that would seem to be a lemon, after you’ve gotten past the immediate worries of securing day-to-day transportation, one of your first questions may be: “Do I have to participate in arbitration to pursue a lemon law case?” The answer is relatively complicated and will vary from person to person--even within the state of California.

Why Not Arbitrate?
When you first think about it, using an arbitrator may not seem like a bad idea. As an honest consumer, you would think that something called arbitration would be a fair thing--perhaps something designed to protect you. Also, the manufacturer or dealer will frame the concept in a way that seems positive for you. The very friendly representative who is hired by the manufacturer to work with you will mention that you can resolve the problem and not have to get a lawyer involved. While it may seem convenient to arbitrate, the reality is that the dealer or manufacturer is the one paying for arbitration, it only makes sense that the rules of the arbitration agreement are designed to benefit them and not take care of your best interests.

In fact, vehicle manufacturers and the Better Business Bureau have created the arbitration rules that will almost always work out in favor of the manufacturer. Even if you, as the consumer, win in arbitration, you may not receive the full amount you are entitled to under the law. The Lemon Law wasn’t created to work in this way. Arbitration is something that the automotive industry has designed to protect themselves.


What Can You Do Instead?
A better option for most car buyers is to bypass the arbitration option, if possible, and let a lemon law lawyer handle the case. A knowledgeable lemon law attorney will be able to help you work through the details and get you the best possible result--ideally getting you a cash resolution for your lemon so you can purchase a new vehicle that will suit you best.

So, Do You Have to Arbitrate?
If arbitration doesn’t benefit you, are you required to follow through with it? Arbitration is not a legal requirement. You'll find that the California law does not require that arbitration take place before a lemon law case is heard in court. However, some dealerships or vehicle manufacturers do have arbitration clauses written into the purchase agreement. So, if you are given notice that you must arbitrate, it may not be a state law that requires it, but rather a contract you signed that the dealer “glossed over.”

Just because the dealer says the process is required doesn’t mean that you will have to go through with the arbitration and follow blindly with what is decided. Instead, contact a lemon law attorney, and you will have someone on your side to help you through the arbitration process and what comes afterward. You may not have to attend the arbitration, or it may be canceled altogether, just depending on the situation. You'll finally have someone who has your best interests in mind.


If you have any questions about the lemon law or arbitration, it is best to connect with an attorney now--not later. The last thing you want is to make a mistake during the process and not get everything you are entitled to under the lemon law.