The automobile industry has really tightened their belts on claims handling since the economic downturn. The result is tremendous activity in the Courts for lemon law claims. This course reviews lemon law mediation strategies and considerations for all parties involved.
LEMON LAW MEDIATION STRATEGIES AND CONSIDERATIONS
A. Term Protection – Timing of complaints.
1. First Repair attempt within 18 months or 18,000 miles
2. Action brought within two years of first repair attempt.
B. Merits of Case – “substantial impairment” to Use, Value, or Safety (example, windshield wipers) qualifications defined:
1. Repair attempt – four times; or
2. Out of service (30 days) does not include inspection time; and
3. Use deduction of mileage used as numerator over 100,000 miles as denominator to calculate percentage of value used
C. Average Verdict Amount Where Plaintiff Wins for Plaintiff = 10% to 20% of Total Purchase Price
D. Greatest Leverage for Plaintiff to Settle
1. High mileage
2. Heavy use
3. Car actually fixed
4. Plaintiff comes off poorly (lacks jury appeal)
5. Problem not significant impairment
E. Greatest Leverage for Manufacturer to Settle
1. Low mileage – car parked
2. Problem identified but not fixed
3. Attorney fees and expenses
F. Defendants’ Strategy
Rule 68 – Offer of Judgment (freeze attorney fees if jury verdict equals or less than settlement offer).
G. Object to Plaintiff Attorney’s Fee Petition
1. On the basis of being unilateral
2. Because it is a contingency agreement, not hourly (not percentage contingency fee, but contingent on recovery)
H Mediator’s Effectiveness
1. Enhanced by quality of plaintiff and defense attorneys
2. Knowledge of Lemon Law
3. Persuasive ability and confidence level built with parties