Informal Resolution or Going the Ways of Courts: Which is Better Way to Resolve a Lemon?

By Seomul Evans

'Lemons' otherwise known as underperforming vehicles due to repeated repairs are considered as serious issues. Just imagine wasting your resources on an almost-worthless car since you rarely use it and due to its numerous visits to the repair shop. This is a common complaint in many parts of the country, and the good thing is that there is a law that covers this problem. The law is affectionately called the 'Lemon Law', and all states in the United States have its own version of this law. The general intent of the law is similar- to provide assistance and remedy to consumers in order to compensate for vehicles that have repeatedly failed to meet the standards and expected quality of performance. So for many duped consumers, the most common way of settling the issue of 'lemons' is to file a case since they are protected by the law. Though this is good still the question lingers: is this the only way to settle this kind of dispute?

If you are looking at the cost-effective way of settling disputes on 'lemons', it's easy to note that going to the court and asking the services of the lawyer can be costly. The cost is more pronounced on the part of the ordinary consumer who religiously saved for the car and in the end getting duped by the dealer. For those looking for another way of settling the issue without court intervention (and attendant costs of course), the recommended manner is to settle the issue through an informal resolution. This kind of approach is fast gaining acceptance now, and even the Congress has encouraged consumers to go the way of informal resolution. In the words of the Congress, consumers should pursue "informal dispute settlement procedures" where the warranty disputes are characterized by fair decisions.

The main reason for pushing for the informal way of resolution is the cost typically associated with warranty litigation. The consumers may know their rights and know a thing or two about the warranties but often the cost of litigation is the thing that makes the pursuit of consumer rights prohibitive. Some of the typical costs associated with pursuing consumer rights related to 'lemons' include the attorney fees and other documentary fees. Often, pursuing these rights is only applicable if personal injury has been noted. But if this is absent and it's all about getting the purchase cost, then the informal settlement may be a good move. But it should be noted that there is a limitation as well if consumer goes the informal route. In many cases, the direction and the ultimate result of the settlement will be highly dependent on the seller/dealer or the manufacturer's willingness to live up to its offers as provided in the vehicle's warranty.

Another reason why many consumers are going the informal route lies on speed. It is expected that the litigation may take months or even years if lawyers and courts are involved. The process can be cut short if the consumers and the dealers can sit down and thresh out matters informally. And in order to ensure that the consumers will not be shortchanged by the more knowledgeable manufacturers, Congress has empowered the Federal Trade Commission. The Commission ensures that the warrantors (sellers) must meet the minimum requirements before the consumer can file a case. In short the Commission ensures fairness in these proceedings, for example in ensuring equal representation. By and large, going informal is good but in order to increase your chances its best to solicit advices from legal minds.

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