PA 07-212—SB 739

Transportation Committee

AN ACT CONCERNING THE NEW MOTOR VEHICLE LEMON LAW

SUMMARY: This act replaces the three-member arbitration panels that hear new motor vehicle lemon law disputes with single arbitrators. It sets standards for arbitrators, allows the consumer protection commissioner to refer cases to more arbitration organizations, and revises the conditions under which disputes may be settled solely based on written documents.

By law, licensed motor vehicle dealers and repairers may perform vehicle identification number (VIN) inspections. The act permits a dealer or repairer to charge up to $20 for each VIN inspection done when it is not in connection with an official emissions inspection, if the dealer or repairer provides the motor vehicle commissioner an affidavit concerning the inspection.

EFFECTIVE DATE: October 1, 2007

ARBITRATOR AND ARBITRATION ORGANIZATIONS

Under prior law, (1) the consumer protection commissioner had to appoint three-person arbitration panels, only one member of which could be directly involved in a product's production, sale, or service; (2) all three members had to serve without compensation and be interested in consumer disputes; and (3) appointments were for two years at the commissioner's discretion. The act instead requires the commissioner to appoint individuals as arbitrators. An appointed arbitrator must (1) be a member of an arbitration organization; (2) be paid; and (3) not be an employee or independent contractor of a business that manufactures, distributes, sells, or services motor vehicles.

Under prior law, the commissioner could refer disputes to the American Arbitration Association. The act allows him also to refer disputes to other arbitration organizations. It prohibits an arbitration organization and any arbitrators it appoints from being affiliated with a motor vehicle manufacturer, distributor, dealer, or repairer. It requires the organization to follow the lemon law's arbitration procedures.

ORAL OR WRITTEN TESTIMONY

By law, when a consumer requests lemon law arbitration, he or she must provide the Department of Consumer Protection any information relevant to the dispute on a complaint form the department makes available. Prior law required the complaint form to state that consumers may present additional oral or written testimony. The act eliminates this requirement.

The act instead allows the department to present a case to an arbitrator solely based on the parties' written documents, but only if the consumer and the motor vehicle manufacturer agree in writing and the agreement is signed after the customer has requested arbitration.

BACKGROUND

Lemon Law

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

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

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

3. 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.

OLR Tracking: JLK: KS: JL: RO