Dallas Auto Accident Attorney | Automakers Attempt to Replace Class-Actions with Arbitration | Frenkel & Frenkel
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Jul 11
2013

Dallas Auto Accident Attorney | Automakers Attempt to Replace Class-Actions with Arbitration

 

Dallas auto accident attorney Dallas auto accident attorney, Frenkel & Frenkel, explain how automaker’s attempts to replace class action suits with arbitration could hurt consumers.

 

Dallas auto accident attorney, Frenkel & Frenkel, sees recent attempts by the auto industry to replace class-action suits with arbitration as a problem for consumers.  In an effort to eliminate such lawsuits, several automakers, including Honda, Toyota and Mercedes-Benz, are claiming that dealer agreements signed by the customer that require the use of arbitration to resolve disputes applies to the dealer as well.  Consumer groups argue that such practices could put consumers at a disadvantage. Benefit of Class-Action Suits Consumer advocates, as well as Dallas auto accident attorney Frenkel & Frenkel, believe that class-action suits provide a necessary consumer protection, while critics argue that the suits often benefit the plaintiff’s lawyers more than they do the consumer.  However, there are cases where class-action suits revealed information about major defects in vehicles that automakers would have preferred kept secret, which would have been possible had the consumer been required to use arbitration instead.  There are cases where class-action suits brought to light serious problems, and, in one case, led to the passage of laws designed to protect consumers. Firestone Class-Action One class-action case that prompted Congressional hearings was the failure of Firestone tires on Ford Explorers.  These hearings led to the passage of the Transportation Recall Enhancement, Accountability and Documentation Act in 2000, a law that would not have existed had arbitration been required to resolve the dispute.  Honda and Toyota both asked the courts to dismiss class-action suits in different cases, requesting instead to use arbitration.  The Honda case involved models that burned oil at a high rate, and the Toyota case involved allegations of unintended acceleration.  Both requests were denied.  However, in 2012, Mercedes-Benz was successful in requiring an owner to use arbitration instead of filing suit under the state’s lemon-law, and Dallas auto accident attorney, Frenkel & Frenkel worry that this case could set a dangerous precedent against consumer protection. Dealer Reluctance Automakers are pressuring dealers to include them in the agreement signed when customers purchase a vehicle, and there are concerns that, if the dealers agree, there would be a huge decrease in class-action and lemon law cases brought against automakers.  However, most dealers are reluctant to link themselves legally with the automaker in such an agreement.  In most cases, the dealers do not view themselves as the agents of the manufacturer, and feel as if involving the dealer in such a controversial matter could be detrimental.  As a Dallas auto accident attorney, Frenkel & Frenkel agrees that an arbitration agreement between the dealer and the consumer should not also apply to the manufacturer. If you need a Dallas auto accident attorney, visit our website or give us a call at 1-800-834-0000.