Why Arbitration Might Not Be Your Best Option in a Lemon Law Case

When you buy a vehicle—especially from a large dealership or manufacturer—you might be asked to sign an agreement that includes an arbitration clause. It sounds harmless enough: a quicker, less expensive way to resolve disputes without going to court. But when it comes to lemon law cases, arbitration can actually work against you.

Here’s what you need to know before agreeing to arbitration—and why taking your lemon law case to court may be the better path.

What Is Arbitration?

Arbitration is a form of alternative dispute resolution (ADR), where a neutral third party (the arbitrator) decides the outcome of your case, rather than a judge or jury. It’s often marketed as:

- Faster than litigation

- Less expensive

- More private

But for consumers, the reality can be very different.

Why Arbitration Is Risky in Lemon Law Cases

⚠️ You're Waiving Your Right to a Jury

When you agree to arbitration, you're giving up your right to take the case to court and have it heard by a jury. This can significantly reduce your negotiating power and limit your chances of a full recovery.

⚖️ The Arbitrator May Not Be Truly Neutral

In many arbitration systems—especially those run by manufacturer-friendly organizations—the arbitrators are picked from a pool that often hears cases from the same automakers again and again. That can create a built-in bias.

🕵️ Limited Discovery = Limited Evidence

In court, your attorney can compel the manufacturer to hand over documents, service records, and other key evidence. Arbitration often restricts discovery, which can make it harder to build a strong case.

🚫 Arbitration Decisions Are Final

Arbitration awards are binding in most cases, meaning you can’t appeal, even if the arbitrator makes a mistake or rules unfairly. That’s a major gamble when your money, time, and vehicle are on the line.

Do You Have to Agree to Arbitration in a Lemon Law Case?

Not always. In California, for example:

- Arbitration is typically voluntary in lemon law claims

- You cannot be forced into manufacturer-sponsored arbitration before filing a lawsuit

- You have the right to consult an attorney and explore your full legal options

Always read the fine print and don’t be afraid to walk away from arbitration if it doesn’t serve your best interest.

So, What’s the Better Option?

For most consumers, pursuing a lemon law claim through the courts—with the help of an experienced attorney—is the stronger, safer path. An attorney can:

- Level the playing field against big manufacturers

- Help you avoid waiving important legal rights

- Get you a better settlement or result

Bottom Line

Arbitration might sound convenient, but in lemon law cases, it often benefits the manufacturer more than the consumer. Don’t settle for less than you deserve. If you believe you’ve been sold a lemon, talk to a qualified lemon law attorney before agreeing to arbitration.

📞 Need help with a lemon law case? Contact C&C Lemon Factory today for a free consultation at 949-535-1800. We’ll review your case, explain your rights, and help you make the best decision—not just the fastest one.