What Is Lemon Law Arbitration?

Arbitration is an inexpensive and informal way to resolve your complaint without going to court. In arbitration, the consumer and the manufacturer present evidence about the condition of the vehicle to an impartial arbitrator. The arbitrator will then decide the case and issue a written decision. There are two types of lemon arbitration: state­run and manufacturer­sponsored.

State Lemon Arbitration. The state`s Lemon Law Arbitration Program hears only Lemon Law cases. You will receive an arbitrator`s decision within 45 days of acceptance of your arbitration request. Except for a $1 arbitration fee you pay when you purchase your new vehicle, there is no fee for State Lemon Arbitration. To qualify for State Lemon Arbitration you must have a substantial defect your dealer has not been able to repair and you must have applied for State Lemon Arbitration within 2 years from when your vehicle was first delivered and before the manufacturer`s warranty has expired.

Final Repair Opportunity: Before applying for Lemon Law Arbitration you must have notified the dealer or the manufacturer in writing that your vehicle is a lemon and you want either a refund or replacement. If the manufacturer contacts you within seven business days of receipt of the letter, you must allow a final repair effort during that period.

Neutral State Arbitrators: The Attorney General has selected the Secretary of State`s Hearing Examiners Office in the Department of Motor Vehicles to conduct all State Lemon Law Arbitrations. These Hearing Examiners are neutral professional examiners, and will hold Lemon Law Arbitrations in different locations around the state.

State Arbitration is All or Nothing. The purpose of a state­run arbitration hearing is to determine whether or not your vehicle qualifies for refund or replacement under the Lemon Law. If the arbitrator determines that your vehicle meets the Lemon Law standards, you will be awarded a full refund (less the use allowance and the amount of any previous settlement from the manufacturer) or replacement. If the arbitrator decides that your vehicle is not a lemon, there will be no award.

Manufacturer­sponsored Arbitrations. You may also request manufacturer­sponsored arbitration for Lemon Law defects, as well as for other less serious problems. A manufacturer arbitrator or panel will not necessarily apply the Lemon Law standards. The arbitrator can order additional repairs or partial or full refunds. Most manufacturers are bound by the decisions of their arbitration programs. However, if you are dissatisfied with the results of manufacturer­sponsored arbitration, you may then request state­run arbitration or you can sue in court under the Maine Lemon Law or other Maine laws. Your warranty booklet should provide you with additional information about the manufacturer`s arbitration program or you can contact its zone or regional office.

Differences Between State and Manufacturer Arbitrations. The two main differences between the manufacturers` arbitration programs and the State Lemon Law Arbitration are:

(a) The manufacturer`s arbitration program can order additional repairs, but the state arbitration program can only order a replacement vehicle or a full refund or no relief at all; and

(b) The manufacturer is bound by its own arbitrator`s decision, but can appeal a state`s arbitration decision.

Lemon Court Options. If the state arbitrator`s decision is not favorable you can appeal it to Superior Court or you can initiate on your own a new court action. This new court action can ask for Lemon Law remedies or other relief that may be available to you under the Maine Unfair Trade Practices Act, the Maine Uniform Commercial Code, common law or other state or federal laws. Consult an attorney. If you are considering an appeal or a new court action you should certainly consult an attorney.

The information on this page is meant to provide a general overview of the law. The laws in your state and/or city may deviate significantly from those described here. If you have specific questions related to your situation you should speak with a local attorney.

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