OLR Bill Analysis

SB 739 (File 217, as amended by Senate “A”)*

AN ACT CONCERNING REPAIRS TO MOTOR VEHICLES.

SUMMARY:

This bill:

1. replaces the arbitration panels that hear new motor vehicle lemon law disputes with single arbitrators,

2. sets standards for the arbitrators,

3. allows the consumer protection commissioner to refer cases to more arbitration organizations, and

4. revises the conditions under which disputes may be settled solely on the basis of written documents.

Current law permits licensed automobile dealers and repairers to perform vehicle identification number (VIN) inspections. The bill permits the dealers and repairers to charge up to $ 20 for each VIN inspection not done in connection with an official emissions inspection. By law, the dealer or repairer must provide the motor vehicle commissioner an affidavit concerning the inspection.

*Senate Amendment “A” replaces the original bill (File 217), which prohibits automobile insurers and appraisers from requesting that customers use a specific repair shop. The amended bill revises the motor vehicle lemon law and permits automobile repairers and dealers to charge for certain VIN inspections.

EFFECTIVE DATE: October 1, 2007

ARBITRATOR AND ARBITRATION ORGANIZATIONS

The bill requires the consumer protection commissioner to appoint individuals as arbitrators who are not employees or independent contractors of a business involved in manufacturing, distributing, selling, or servicing motor vehicles. Appointed arbitrators must be paid and be members of an arbitration organization. Under current law, (1) the commissioner must appoint three-member panels, only one of whom may be directly involved in the production and sale of a product; (2) all three members must serve without compensation and be interested in consumer disputes; and (3) appointments are for two years at the commissioner's discretion.

The bill allows the commissioner to refer disputes to other arbitration organizations in addition to the American Arbitration Association and prohibits the organization and any arbitrator it appoints from being affiliated with a motor vehicle manufacturer, distributor, dealer, or repairer. It requires the organizations to follow the lemon law's statutorily established arbitration procedures.

ORAL OR WRITTEN TESTIMONY

Current law requires a consumer's lemon law complaint form to state that the consumer has the choice of presenting additional testimony orally or in writing. The bill eliminates this requirement. It allows the consumer and the motor vehicle manufacturer to enter a written agreement, signed after the customer has requested lemon law arbitration, that the case may be presented to the arbitrator solely based on the parties' written documents.

BACKGROUND

Lemon Law

The lemon law establishes a consumer's right to a refund or a replacement vehicle if, after a reasonable number of repair attempts, it cannot be made to conform to applicable express warranties. A “reasonable number of repair attempts” has been made when the vehicle has a defect that substantially impairs its use, safety, or value, and the vehicle:

1. has been repaired four or more times during the first 24,000 miles or two years of service;

2. has been out of service for a total of 30 days during the same period and the defect remains; or

3. has been repaired two or more times during the first year or the warranty term, whichever is shorter, and the defect is likely to cause death or serious bodily injury if the vehicle is driven.

COMMITTEE ACTION

Transportation Committee

Joint Favorable

Yea

34

Nay

0

(03/14/2007)