By Malisa "Lise" Prisarojn

A Framework for Early Resolution

California’s automotive Lemon Law landscape is evolving quickly. As the number of claims filed under the Song-Beverly Consumer Warranty Act, commonly known as California’s Lemon Law, continues to climb, a new legal framework is taking shape. With the enactment of Assembly Bill 1755 (AB 1755) and the implementation of California Code of Civil Procedure §871.26, a structured mediation process was set to take effect on April 1, 2025. However, the recent passage of Senate Bill 26 (SB 26) has made key adjustments to this rollout, introducing new timelines and allowing manufacturers to opt into the AB 1755 framework.

Should manufacturers opt in, mandatory mediation is meant to reduce litigation backlogs and encourage early, efficient dispute resolution, but it will require a robust infrastructure to manage and mediate these claims effectively. That’s where the American Arbitration Association® (AAA) comes in.

The passage of AB 1755 reflects a growing recognition that courtrooms aren’t always the best venue for consumers and manufacturers to resolve Lemon Law disputes. Under AB 1755, mediation must occur within 150 days after filing an answer or other responsive pleading. These changes are formalized under California Code of Civil Procedure §871.26, which lays out specific steps and timelines for initiating mediation.

SB 26, signed into law in April 2025, builds on this foundation by allowing manufacturers to opt-in. Manufacturers that choose to opt in must notify the Department of Consumer Affairs' Arbitration Certification Program within 30 days of enactment, by May 2, 2025, and must commit to the process for five years following the election date. Manufacturers who do not opt in will continue operating under the prior legal structure.

Additionally, SB 26 postpones to July 1, 2025, the pre-dispute notice requirement, providing parties more time to prepare for the new system. This notice requirement mandates that consumers provide manufacturers with an opportunity to resolve certain disputes prior to seeking civil penalties.

In short, if the manufacturer elects, mediation is a required step in any qualifying litigation where a consumer seeks restitution or replacement of a motor vehicle under the Lemon Law. As the volume of Lemon Law cases rises, so does the need for experienced, impartial, and efficient dispute resolution services. 

AAA Supports All Stakeholders

The AAA is offering a new set of Consumer Mediation Procedures, effective April 1, 2025, tailored to meet the needs to mediate California Lemon Law claims, among other consumer disputes.

Here’s how the AAA is prepared to support consumers, manufacturers, and their legal representatives:

1. A Fast, Streamlined Process

The AAA’s Consumer mediation process has been purpose-built for speed and simplicity. Claimants can quickly initiate mediation by filling out a straightforward CA Lemon Law Request for Mediation Form. Disputants can also review our new Consumer Mediation Procedures & Fee Schedule, keeping in mind that under California Code of Civil Procedure §871.26, the consumer and manufacturer split the costs for mediation equally. 

2. Expert Neutrals with Lemon Law Experience

Mediating a Lemon Law claim requires more than just legal knowledge—it demands specialized experience in automotive warranty issues and the practical realities of vehicle repair, valuation, and replacement. The AAA has built a specialty panel of vetted, experienced mediators.

These specialty panelists bring credibility, impartiality, and a deep understanding of the nuances of Lemon Law disputes. Their guidance helps parties find common ground and reach resolution efficiently, potentially avoiding the time, cost, and stress of litigation altogether.

3. Capacity to Handle High-Volume Caseloads

With decades of experience administering large-scale mediation programs, the AAA is well-equipped to handle the expected surge in Lemon Law mediations. Whether it's ten cases or ten thousand, the AAA is ready to respond with:

• Administrative efficiency
• Consistent case handling
• Dedicated case managers
• Robust infrastructure and digital tools

The AAA’s ability to scale while maintaining fairness and professionalism makes it a trusted partner in meeting the needs of all parties. 

A Neutral Forum for Resolution

For consumers, mediation adds a step to the process—one designed to facilitate quicker resolution and potentially reduce legal costs. It provides a confidential, non-adversarial forum to have their concerns heard and addressed.

For legal counsel and manufacturers, the need for a dependable, experienced mediation provider is more critical than ever. Working with the AAA provides fairness and efficiency, where each case is administered according to industry best practices, in compliance with applicable regulations, and with neutrality at the forefront.  

With the enactment of SB 26, mediation is no longer uniformly mandatory across all Lemon Law disputes; it applies when the manufacturer has opted into the program. The AAA is well-positioned to support either framework, offering a consistent dispute resolution experience that is fair and efficient for all   participants. 

To learn more about our Consumer Division, access our forms, or initiate a mediation online, visit: adr.org/consumer.

Have questions or need support? The AAA’s team of experienced case managers is here to help guide you every step of the way. Contact a mediation specialist at mediationservices@adr.org.