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Breakout Session #Breakout Session # 106106
Jo DeMars, PresidentJo DeMars, President
Amy Koltz, Process & Compliance MangerAmy Koltz, Process & Compliance Manger
DeMars & Associates, Ltd.DeMars & Associates, Ltd.
Wednesday, April 15, 2008 Wednesday, April 15, 2008
3:20 – 4:20 PM3:20 – 4:20 PM
ADR: Face-to-Face or ADR: Face-to-Face or CyberspaceCyberspace
Agenda
IntroductionHistory of Consumer Warranty
Dispute Resolution ProgramsTraditional Dispute Resolution
ForumsOnline Dispute ResolutionRecommendations
About DeMars & Associates, Ltd.
• Founded in 1988
• Headquarters in Waukesha, WI
• Activities: Training, public policy forums, consulting, and dispute resolution program design and management
• We provide services to the following
industries:
Automotive Homebuilding
e-Commerce Recreational Vehicles
Client ListProfessional Warranty Service Corporation
Residential Warranty Corporation2-10 Home Buyers Warranty
Quality Builders WarrantyBonded Builders Warranty Group
Thor Industries, Inc.National RV Holdings, Inc.
Monaco Coach Corporation Winnebago Industries
Coachmen Recreational Vehicle CompanyFreightliner Custom ChassisWorkhorse Custom Chassis
eBay MotorsPayPal
Big Dog MotorcyclesMetropolitan Builders Association
Agenda
IntroductionHistory of Consumer Warranty
Dispute Resolution ProgramsTraditional Dispute Resolution
ForumsOnline Dispute ResolutionRecommendations
How in the World Did We Get Lemon Laws?
President John F. Kennedy President John F. Kennedy
The Consumer Bill of RightsThe Consumer Bill of Rights
InformedInformed SafeSafe
ChoiceChoice HeardHeard
RedressRedress
How in the World Did We Get Lemon Laws?
Federal Consumer Protection AgenciesFederal Consumer Protection Agencies::
Consumer Product Safety Commission
White House Office of Consumer Affairs
Department of Consumer Education
LegislationLegislation::
Fair Credit Reporting Act
Magnusson-Moss Warranty Act
How in the World Did We Get Lemon Laws?
Results:
Increased awareness
Increased willingness to complain
Increased expectations
How in the World Did We Get Lemon Laws?
Which Came First:
Arbitration Programs or
Lemon Laws?
Which Came First: Arbitration Programs or Lemon Laws?
Ralph Nader, Unsafe at Any Speed
Magnuson-Moss Warranty Act
Federal Trade Commission Part 703
Alternative Dispute Resolution Programs
Individual State Replace/Repurchase Statutes
Certification
Minimum Requirements
Free to consumers
Funded & staffed to ensure fair & expeditious resolution of disputes
Funded & staffed to ensure mechanism members are insulated from
warrantor—to avoid influence.
funds committed in advance
personnel decisions based solely on merit
no conflicting duties
Magnuson-Moss Warranty Act16 CFR Part 703
Mechanism has a maximum of 40 days from notification of dispute to render a decision.
Two permissible delays:
Consumer did not provide required information
Consumer has not sought relief directly from the warrantor
Decisions
Magnuson-Moss Warranty Act16 CFR Part 703
Decisions are technically not binding on any party to the dispute.
However, the warrantor is required to act in good faith and comply.
Decisions are admissible in court.
Effect of Decisions
Magnuson-Moss Warranty Act16 CFR Part 703
What Is AWhat Is A
Lemon Law?Lemon Law?
Notify manufacturer Substantial nonconformity Number of repair attempts Number of days out of service Affects use, value, or safety Time period
Components Of Lemon Laws
Song-Beverly Consumer Warranty ActCalifornia Civil Code §§ 1790 et seq
Contains the “Tanner Consumer
Protection Act” (§ 1793.22)
The CaliforniaLemon Law
4 repair attempts/30 days out of svc.
Customer is entitled to a buy back:
4 repair attempts for the same nonconformity, or
30 days out of service for any nonconformity, or
2 repair attempts for a nonconformity that results in a condition likely to cause death or serious injury & the mfr. has been informed of need for repair.
California Lemon Law Presumption
Agenda
IntroductionHistory of Consumer Warranty
Dispute Resolution ProgramsTraditional Dispute Resolution
ForumsOnline Dispute ResolutionRecommendations
Traditional Dispute Resolution Forums
MEDIATIONMEDIATIONARBITRATION & ARBITRATION &
LITIGATIONLITIGATION
Mediation
Mediation is a process in which a neutral, third-party (the Mediator) assists the parties to a dispute in reaching a mutually acceptable settlement.
Mediation is a process in which a neutral, third-party (the Mediator) assists the parties to a dispute in reaching a mutually acceptable settlement.
The mediation process is informal, voluntary and the mediator may not impose a settlement on the parties.
The mediation process is informal, voluntary and the mediator may not impose a settlement on the parties.
Dispute Resolution Forums
6 steps to a mediation:
1) introductory remarks by the mediator, 2) statement of the problem by the parties, 3) information gathering time, 4) identification of the problems, 5) bargaining and generating options, and 6) reaching an agreement.
Mediation
Dispute Resolution Forums
Benefits:
• Opportunity for parties to vent & be heard by someone outside the dispute
• Mediator does not impose a solution• Parties are more likely to uphold & find
satisfaction in an agreement they craft
Mediation
Dispute Resolution Forums
Arbitration is a process in which a neutral, third-party (the Arbitrator) makes a final decision based on written documents and/or oral presentations by the parties.
Arbitration is a process in which a neutral, third-party (the Arbitrator) makes a final decision based on written documents and/or oral presentations by the parties.
The process is informal and may be mandatory or voluntary. The arbitrator’s decision may be binding, conditionally binding or non-binding.
The process is informal and may be mandatory or voluntary. The arbitrator’s decision may be binding, conditionally binding or non-binding.
Arbitration
Dispute Resolution Forums
6 steps to an arbitration hearing:
1) Introductory remarks by the arbitrator, 2) opening statements by the parties, 3) complainant’s witness testimony, 4) respondent’s witness testimony, 5) closing statements by the parties, and 6) arbitrator renders decision after hearing.
Arbitration
Dispute Resolution Forums
Benefits:
• Less costly than litigation• Less time consuming than litigation• Decision is final, no appeals process• Confidentiality of the process
Arbitration
Dispute Resolution Forums
Litigation
Court proceedings in small claims court or civil court.
Best application:When your goal is setting a precedent or creating public policy.
Dispute Resolution Forums
Example:
Consumer Arbitration Program for Recreational Vehicles
Dispute Resolution Programs
Notify Dealer
Notify Manufacturer - Conciliation
DR Program - Mediation
DR Program - Arbitration
A Four S
tep
Process
Automotive Consumer Steps for Escalating Dispute
Dispute Resolution Programs
Application
Submitted by complaining party
Life of a Complaint
Mediated Agreement
Parties come to a mutually agreeable resolution with the
assistance of a neutral, third-party.
Life of a Complaint
Arbitrated Decision
Arbitrator renders a decision based on the evidence that is final, definite
and complete.
Decision becomes binding when consumer accepts.
Life of a Complaint
Acceptance
Customer has 30 days to accept the arbitrator’s
decision.
Life of a Complaint
Action Performance
Program Administration places a follow-up call to the customer to ensure the manufacturer has implemented the
mediated agreement or
arbitration award in the
specified timeframe.
Life of a Complaint
Agenda
IntroductionHistory of Consumer Warranty
Dispute Resolution ProgramsTraditional Dispute Resolution
ForumsOnline Dispute ResolutionRecommendations
Online Dispute ResolutionWhat is It?
Online Dispute Resolution adapts electronic applications to well-known
traditional alternative dispute resolution processes, such as negotiation,
mediation and arbitration.
ODR may use a chat room format, email, or any other electronic system for transferring information. Each system has advantages and disadvantages.
Authenticating Users
Handling Payment
Gathering Data
Communicating with the Parties
Writing the Text
Making the Site:
User Friendly (pop ups)
Visually Appealing
Clear
Designing the Appearance & Functionality of the Site
Some Considerations:
How much can parties submit?
Should attachments be allowed?
Will a party be able to log in later to see the status of the claim?
Should each party get the opportunity to rebut?
How is payment handled?
What is a reasonable number of attempts to contact the respondent?
How do we transfer the outcome to interested non-party?
Designing the Appearance & Functionality of the Site
Designing the Process Flow
Agenda
IntroductionHistory of Consumer Warranty
Dispute Resolution ProgramsTraditional Dispute Resolution
ForumsOnline Dispute ResolutionRecommendations
Recommendations
Considerations for Implementing Dispute Resolution Programs :
Business Environment Legal Exposure
Customer Service Goals
Recommendations
Best application for Face to Face Mediation:
When goal is maintaining/keeping
relationship with the customer/client.
Parties can craft an
agreement incorporating solutions
that are not available through court.
Recommendations
Best application for Face to Face Arbitration:When your goal is resolving the matter rather than
salvaging the relationship.
When review of the dispute necessitates a visual inspection or demonstration of product.
Good when you just want a resolution and can live with whatever the arbitrator decides.
Recommendations
Best application for ODR:When goal is resolving a straight-forward dispute that is
easily documented in writing & photos.
Ideal option when: Parties have physical or
geographical limitations Time is of the essence No ongoing relationship
Contact Us
DeMars & Associates, Ltd.P.O. Box 1424
Waukesha, WI 53187
1-800-279-5343