Lemon Law Attorney's Fees and Costs

Many lemon laws, and the federal Magnuson-Moss Warranty Act, let a consumer who wins recover reasonable attorney's fees from the manufacturer. Lawyers call this fee-shifting, and it is written into the statutes themselves.

Fee-shifting has limits, though. It usually depends on winning, a judge or arbitrator decides what's reasonable, and the rules differ from state to state. This page explains how it works, without promises about any case.

How fee-shifting works in lemon law cases

Fee-shifting means the law lets a winning consumer ask the court to order the manufacturer to pay reasonable attorney's fees and costs. Where it applies, it comes from the text of the lemon law or Magnuson-Moss, so the exact wording of the statute matters.

Three questions decide how it applies in a given case:

1. Which law is the claim under? State lemon law, Magnuson-Moss, or both.
2. Did the consumer win? Most fee rules apply only to a consumer who prevails.
3. What is reasonable? The court or arbitrator decides the amount, based on the work actually done.

Fee-shifting under Magnuson-Moss, §2310(d)(2)

Under federal law, a consumer who "finally prevails" may be allowed fees and costs, and the court has discretion. The full rule reads:

If a consumer finally prevails in any action brought under paragraph (1) of this subsection, he may be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of cost and expenses (including attorneys' fees based on actual time expended) determined by the court to have been reasonably incurred by the plaintiff for or in connection with the commencement and prosecution of such action, unless the court in its discretion shall determine that such an award of attorneys' fees would be inappropriate.

15 U.S.C. §2310(d)(2)

Four points in that sentence matter most:

• "Finally prevails." The consumer has to win in the end.
• "May be allowed." The award is permitted, not automatic.
• "Actual time expended." Fees are based on the time the lawyer actually spent on the case.
• "Would be inappropriate." The court can refuse fees if it decides an award isn't appropriate.

The federal rule applies to claims under Magnuson-Moss, whether filed in state or federal court. Our Magnuson-Moss page explains when those claims are available.

Fee-shifting under state lemon laws

Most state lemon laws have their own fee rule, and the wording varies. Here are examples we checked in the statute text:

The difference between "shall" and "may" matters. "Shall" means the court must award reasonable fees to a winning consumer. "May" leaves it to the court's judgment. Either way, the court decides what amount is reasonable.

Some states also build fees into appeal rules. In Massachusetts, a manufacturer appealing a state arbitration award must post a bond that includes $2,500 "for anticipated attorneys' fees" payable to the consumer (G.L. c. 90, §7N½(6)). For the rule in your state, see your state's lemon law page.

Fees and costs in arbitration

Fees work differently in arbitration than in court. Manufacturer programs that follow FTC rules can't charge you to file: the program "shall not charge consumers any fee" (16 CFR §703.3(a)). Those programs don't have to award attorney's fees, though.

Some state programs do. Washington's board awards fees and costs in the situations listed in RCW 19.118.090(6)(b), tied to whether the manufacturer had counsel. In Florida, when a court upholds a board decision for the consumer, recovery includes "attorney's fees incurred in obtaining confirmation of the award" (Fla. Stat. §681.1095(13)). New York's state program requires a filing fee (N.Y. Gen. Bus. Law §198-a(k)).

Our page on arbitration and dispute programs covers how each kind of program works.

When a state lemon law and Magnuson-Moss both apply

Many owners have claims under both laws, and the fee rules for each can differ. Magnuson-Moss doesn't push state law aside. It says nothing in the Act "shall invalidate or restrict any right or remedy of any consumer under State law or any other Federal law" (15 U.S.C. §2311(b)(1)).

That matters for fees in two ways. First, the wording may differ: a state rule may say the court "shall" award fees, while the federal rule says fees "may be allowed." Second, the conditions may differ. A state lemon law may cover only new vehicles, while Magnuson-Moss reaches written warranties, implied warranties and service contracts on new and used vehicles alike (§2310(d)(1)). Which claims are brought, and under which laws, can affect how fees are decided at the end.

Fees in used-car cases

Used-car buyers can have fee-shifting rights too, even where no new-car lemon law applies. The Magnuson-Moss fee rule covers any action under §2310(d)(1), which includes a claim that a seller broke a written warranty, an implied warranty or a service contract (15 U.S.C. §2310(d)(1)-(2)).

Some state used-car laws have their own fee rules. New York lets a court award reasonable attorney's fees to a prevailing plaintiff in an action to enforce its used car law (N.Y. Gen. Bus. Law §198-b(f)). Massachusetts requires a dealer that appeals a used-car arbitration finding to post a bond that includes $500 "for anticipated attorneys' fees" payable to the consumer (G.L. c. 90, §7N¼(3)). Our page on lemon law for used cars explains when these laws apply.

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What fee-shifting does not mean

Fee-shifting is a rule about who may be ordered to pay after a win. It doesn't mean:

• That every case wins. Most fee rules apply only to a consumer who prevails.
• That fees are paid in full. The court or arbitrator decides what amount is reasonable, and may award less than was billed.
• That every cost is covered. What counts as a recoverable cost varies by statute.
• That settlements follow the same rule. If a case settles, the settlement terms decide how fees are handled.

Questions to ask any lawyer about fees

Before you hire anyone, get answers in writing. Useful questions include:

• How is your fee calculated, and who pays it if we win?
• What happens to fees and costs if we lose or the case ends early?
• Will any fees or costs come out of my refund or settlement?
• Who pays filing fees, records costs or inspection costs along the way?
• Will you seek fees from the manufacturer under the state lemon law, Magnuson-Moss or both?

Many lemon laws, and the federal Magnuson-Moss Warranty Act, let a consumer who wins recover reasonable attorney's fees from the manufacturer; we explain exactly how fees work in your case before you sign anything. You can read more about how we work.