A friend of mine recently purchased a new vehicle. She had to return her new car several times as the starter and battery kept failing (I believe the dealer replaced the battery twice and the starter three times). She started to worry that she had purchased a lemon. Frustrated, she called me to find out about the dealer's legal obligations.
Like most professions, we deal with a defined number of issues regularly. However, now and then, something new arises. When this happens, we have a choice. We can refer the matter to someone who deals specifically with the new issue or spend the time familiarizing ourselves with the problem. If we spend time familiarizing ourselves with a new problem, we normally charge our clients for the research. This reality doesn't occur very often as our clients are better served dealing with a lawyer who is familiar with the issue. But some legal issues, like this car problem, are not "big" enough issues for most lawyers – meaning that legal costs to research outweigh the potential benefit. Few clients happily pay $2,000 in legal fees for a $5,000 repair job. In this case, because my "client" is a friend and, as luck would have it, I recently read an article about the issue, I decided to look into it. Based on my research, I offered her advice and wrote this article about consumer options when buying a problem vehicle, otherwise known as a "lemon."
Every state in the U.S. has enacted a "lemon law." While various state laws are somewhat different, in most cases, a manufacturer who sells a lemon must make repairs, replace, or refund a vehicle after a "reasonable" number of repair attempts. Courts can also order manufacturers to pay the legal costs consumers bear when suing under these laws. In Canada, this type of issue falls within provincial jurisdiction, so each province must enact legislation on the issue. Ontario, B.C., Alberta, Nova Scotia, Quebec and Manitoba have enacted legislation on the issue. However, they differ substantially on protections provided to consumers. For example, in Quebec, all vehicles sold are covered under warranty by law. If the vehicle does not measure up to the warranty, the manufacturer must repair at no cost, replace, or refund. The law may also require that the dealer reimburse the consumer if she suffered additional damages due to a defective product. Whereas in Nova Scotia and Manitoba, the laws only compel dealers to disclose the vehicle's history and whether another jurisdiction branded the vehicle as a lemon.
More specifically, in Manitoba, as of January 2012, dealers must disclose if the vehicle:
Consumers can also choose to participate in the Canadian Motor Vehicle Arbitration Plan (CAMVAP). While this is voluntary, consumers must give up their right to sue to participate. Essentially, the consumer and manufacturer plead their respective cases before an impartial arbitrator. The arbitrator can then decide what the manufacturer must do, such as:
According to the CAMVAP annual report, in 2016, in Manitoba, 11 arbitrations were started. In one case, the parties agreed before a decision was rendered. In a second case, the parties negotiated an agreement that the arbitrator recorded. The other 9 cases resulted in 9 arbitrator decisions as follows:
Finally, consumers also have the option to take a manufacturer or dealer to court. While, as indicated above, the legal costs of taking someone to court may outweigh the benefits, consumers may be able to save costs by going through small claims court instead. Small claims court awards in Manitoba are capped at $10,000.00. So if a consumer wants a manufacturer to reimburse or replace a vehicle, she should file a claim in Queen's Bench. However, if the consumer wants the manufacturer to pay for repairs, small claims would provide a cost-effective solution.
Enjoy this subject? Checkout these articles:
Right to Silence: Parking tickets
This article is presented for informational purposes only. The content does not constitute legal advice or solicitation and does not create a solicitor-client relationship (this means that I am not your lawyer until we both agree that I am). If you are seeking advice on specific matters, please contact Philippe Richer at 204.925.1900. We cannot consider any unsolicited information sent to the author as solicitor-client privileged (this means confidential).