Do we need a 'lemon law' to protect consumers from product defects?

Jordan Annan of Vancouver was excited when he bought his first new car, a 2013 Ford Focus.

But the joy of owning new wheels disappeared when Annan's Focus started acting erratically and he had to replace the clutch three times. When the last clutch failed, his car was out of warranty and Annan was told he'd have to pay $3,000 for a new one.

Annan's story isn't dissimilar to those of other Focus and Ford Fiesta owners who are now calling for Canada to adopt a so-called lemon law meant to protect customers.

"It was like I was kind of helpless," said Annan, 30. 

"I don't know much about lemon laws but just having that kind of protection would definitely help going up against a big company like this because what could I really have done after something like this happened?"

Transport Canada has received complaints from 1,777 people about the 2012-2016 Ford Focus and the 2012-2016 Fiesta, leading the department to open a defect investigation two years ago.

'Consumers need protection'

At the other end of the country, June Farmer of Cole Harbour, N.S., has decorated her 2011 Fiesta with decals of scowling lemons and a bumper sticker that reads, "Bought a lemon." 

The country "obviously" needs a lemon law, said Farmer, who is on her sixth clutch and worries about what will happen when her warranty expires and the latest clutch stops working.

"All the issues that people are having.... Customers need protection," she said. 

It's David vs. Goliath

Doug Bethune, a forensic mechanical investigator, has often called for a lemon law. He said there's "little to no protection for consumers" who end up driving away with a dud.

"Right now, consumers — Mr. and Mrs. Jones — are fighting with Goliath," said Bethune, who has been certified by courts as an expert.

"And as far as Canadian consumers are concerned, Goliath has all the weapons and Mr. and Mrs. Jones, or the general public, you're completely at a loss to take on these large corporate manufacturing people. And if you do take them on, then you have to go out of your own pocket, the cost of litigation."

Bethune points to the U.S. where all 50 states, as well as the federal government, have a lemon law.

While the laws vary state to state, they generally provide that when a "reasonable" number of attempts to fix a problem fail, the manufacturer must replace the vehicle or refund the purchase price.

In California, which Bethune said is the gold standard for lemon laws, "reasonable" is defined as four attempts to fix the problem.

That state's legislation also provides for awards for legal fees and addresses the issue of reselling vehicles that have persistent problems. If a car has been designated a lemon, the registration must be branded, there must be a decal on the vehicle indicating it was a lemon law buy-back and the buyer must be given a one-year warranty.

Lemon laws can protect used car buyers, too

Winnipeg resident James Gorman likes that idea. He bought his used 2013 Fiesta in 2015. However, no one mentioned problems with the vehicle when he purchased it or when he took it back soon after because the car was jerking and sputtering.

"Not only was I not made aware of the problem, but I was told it was completely normal," Gorman told CBC in an email.

He had to fight to get Ford to pay for a new clutch, which it eventually did.

The executive director of the Automobile Protection Association, a non-profit consumer advocacy organization, stops short of calling for a lemon law. He points to federal legislation passed last spring that gives the transport minister new powers, including ordering repairs of safety defects.

"The powers are good," said George Iny. "This is just a bad case to test it on because the government is just like a guy that just got a new, gold-plated gym membership but hasn't worked out in years so it's difficult for them."

He said the department now needs more people to help enforce the law.

"So the law gave them extraordinary powers but the investigators are not really backed up by robust legal representation, so all of those things are necessary before we can see just how far along they can move the needle so that we don't get a recurrence of cases like this."

CAMVAP needs improvements

Iny said Canadian warranty protection and oversight by the provinces of warranty practices is woefully inadequate.

Canadians with vehicle problems can take their case to CAMVAP, the Canadian Motor Vehicle Arbitration Program. Among other things, it can order the carmaker to buy back the vehicle, pay for repairs and reimburse complainants for previous repairs.

However, there are restrictions on the age and mileage of vehicles that qualify for arbitration. Its decisions are also final and vehicle owners must agree they will take no further action against the automaker, regardless of the decision.

In four of the nine complaints it heard about the Ford Focus in 2017, CAMVAP ordered Ford to buy back the vehicles but the decision details are not published so it is not possible to determine what issue caused that ruling.

Provinces have representation on the CAMVAP board, but "they have been very weak," said Iny.

Status quo a 'sad situation'

"They have not made significant improvements to the program until recently," he said, adding his association would like CAMVAP to include a definition of lemon so that people can have more certainty about returning a seriously defective vehicle.

In Nova Scotia, the government has added the word "lemon" to the new Traffic Safety Act that it recently passed. However, the definition of a lemon and what will happen to the vehicle once it's declared a lemon will be developed in regulations, which are expected to take two years to complete.

Bethune points out lemon laws are needed for all consumer products, not just cars, but dishwashers, stoves and other manufactured products.

"It's a sad situation when we don't have, in this modern day and age, consumer protection," he said.