What to Watch Out for in a Lemon Law Retainer Agreement

Lemon Law retainer agreement, hidden fees

It has recently come to our attention that a number of California Lemon Law firms charge up front for their services. In addition, some will take a percentage of what they win for you on top of the attorney’s fees and costs that are paid directly by the automobile manufacturer, which is double dipping.

One large Los Angeles law firm’s retainer states that the firm gets 50% of all punitive damages, which is in addition to $500-$1,500 for a 3rd party certified technician vehicle inspection that the client has to pay for up front.

Another large Los Angeles law firm’s retainer says the firm will never charge a client for incurred attorney’s fees, but the client is solely responsible for all attorney’s costs including postage, travel, paper copies, fax copies, seeking assistance of private investigators, etc., even though these costs are 100% recoverable from the automobile manufacturer. Their retainer agreement requires a $250-$400 3rd party certified technician inspection that the client has to pay for up front. Also, there is a clause that states the client gives the attorney a Special Power of Attorney to accept an offer the attorney deems fair and reasonable on the client’s behalf. The attorney can settle the case without even asking the client first!

One large San Diego law firm’s retainer agreement states that the firm gets 50% of all punitive damages.

Our firm charges nothing to the client.

We do not charge our clients for one single thing. You don’t pay for our travel, lodging, office supplies, postage, assistance from private investigators, or automotive expert inspections on your vehicle. If we need to hire an expert witness, we pay their fees.

If we do win any punitive damages, which is incredibly rare, we take one-third, not one-half of the award. Why are punitive damages so rare? As a result of Kwan v. Mercedes-Benz of North America, Inc.., 23 Cal. App. 4th 174 (1994) the California Court of Appeal interpreted the civil penalty provision to be roughly equivalent to punitive damages and therefore concluded that the California legislature intended the civil penalty provision to be a substitute for punitive damages.

Under the California Lemon Law, we recover 100% of our attorney’s fees and costs from the defendant. The automobile manufacturer is required to pay all reasonable attorney’s fees and costs to Plaintiff’s attorney if that attorney wins the case. Do not sign a retainer agreement that gives your attorney YOUR money!

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Debbie Horowitz

Deborah L. Horowitz, an attorney who has been licensed in California to practice law for over 15 years, has dedicated her entire legal career to protecting consumer rights. She has settled over 8,000 lemon law cases and achieved excellent results for her clients.