Charles Stubbs asked:


If you’re like most people, you probably don’t really recognize the difference between an arbitration and a court hearing.

What is Arbitration?

Arbitration is defined as “the process by which the parties to a dispute submit their differences to the judgment of an impartial person or group appointed by mutual consent or statutory provision.”

So in regards to lemon law, an arbitration is when you, the car buyer, attempt to receive a refund or replacement vehicle by using an arbitration committee. Most states have companies that you can use specifically for such arbitrations. The judgement of the arbitration group is final.

Arbitration has several advantages over court hearings. As California Lemon Law observes, arbitration offers time and cost savings over court hearings. The final decision should be decided upon much faster with arbitration. Disadvantages of using arbitration in place of court hearings to decide your case include few options for appealing the decision.

California Lemon Law Arbitration

California was the first state to enact a law to protect customers in the event that they purchased a vehicle that turned out to be what is considered a “lemon”. In the beginning, hearings over California lemon law cases were all handled in court. Later, arbitration became a common way to handle defects that resulted with cars still under their car service contract.

If your vehicle is still under its car warranty, and you’ve had to return it several times for put right work, your problem lies within the lemon law jurisdiction. Rather than schedule a court hearing that will cost you a lot of time and money, California Lemon Law required automobile manufacturers, beginning in 1986, to provide a means to settle claims.

In the vehicle’s owner manual, if the Better Business Bureau Auto Line is listed as the arbitrator, as many California manufacturers do, you contact the manufacturer first with your car issues. You will then contact the Auto Line as defined by the owner’s manual, request and complete a claim form. The BBB forwards the claim to the manufacturer, and the manufacturer is given opportunity to resolve the issue.

If you are happy with the resolution proposed, it’s settled. If you are not satisfied, the Bureau begins the arbitration which means you get to explain the details to an arbitrator at the BBB offices. Bring all of your records of correspondence and put right work. The manufacturer has a chance to speak, and then a decision will be made concerning your claim. Arbitration decisions are normally made within 40 days of filing the claim for lemon law protection.

Arbitration decisions are binding to the manufacturer, but not to you- the customer. What does that mean exactly? If you are not satisfied with the results of the arbitration, than you can take the case into court. If the manufacturer is not happy with the arbitration results because they are required to replace your vehicle or issue a refund. They msy not take the case to court as they are bound to the arbitrators decision.