breakout session # 106 jo demars, president amy koltz, process & compliance manger demars &...

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

info@demarsassociates.com