What Defense Counsel Should Know Before Mediating a Song-Beverly Case

Mediating a Song-Beverly case is not the same as mediating a garden-variety breach of contract dispute. The statute has its own fee structure, its own damages formula, and its own procedural quirks that shape the negotiation whether or not the parties acknowledge them. Defense counsel who walk into lemon law mediation without accounting for these features tend to walk out with worse results than they should have gotten. Here is what to have in your head before the session starts.

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Know the Buyback Number Before You Arrive

The Song-Beverly restitution formula is statutory and there is no good reason to be fuzzy on it going into mediation. Under Cal. Civ. Code § 1793.2(d)(2), the buyback amount includes the actual price paid or payable by the buyer, collateral charges such as sales tax, registration fees, and dealer-installed options, and finance charges incurred by the buyer. From that total, the manufacturer is entitled to deduct an offset for the consumer's use of the vehicle prior to the first repair attempt, calculated as a fraction of the purchase price based on miles driven. Cal. Civ. Code § 1793.2(d)(2)(C).

Model this number before the mediation. Know what your client's best-case offset argument looks like and what the realistic offset is likely to be. Plaintiffs' counsel will have done the same math. If both sides are working from the same statutory formula, the gap between them on actual damages is usually narrower than the opening positions suggest, and knowing that going in prevents you from misreading the negotiation.

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Assess the Civil Penalty Exposure Honestly

The restitution calculation is largely mechanical. The civil penalty is where the real uncertainty lives. Under Cal. Civ. Code § 1794(c), if the manufacturer's failure to comply with section 1793.2 was willful, the buyer may recover a civil penalty of up to two times actual damages. In a case with $40,000 in actual damages, that is a potential $80,000 penalty on top of restitution and fees.

Courts have found willfulness where manufacturers had constructive knowledge of a defect through internal technical service bulletins, warranty claim data, or customer complaint records and still failed to repurchase or replace. See Oregel v. Am. Isuzu Motors, Inc., 90 Cal. App. 4th 1094, 1104-05 (2001). Defense counsel should assess the documentary record on this point with clear eyes. If there are TSBs addressing the precise symptom the consumer complained about, or if the vehicle had prior warranty claims before this consumer took ownership, that record will come up at mediation and should already be factored into your settlement authority.

That said, willfulness is not a foregone conclusion simply because TSBs exist. Courts have also recognized that manufacturers issue TSBs in the ordinary course of warranty administration, and the existence of a bulletin does not automatically establish that a specific consumer's repair attempts were mishandled. A candid assessment cuts both ways.

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Attorney's Fees Accrue Every Day You Wait

Song-Beverly's fee-shifting provision is mandatory. Cal. Civ. Code § 1794(d). If the buyer prevails, the court shall award attorney's fees. That word "shall" has cost manufacturers a great deal of money over the years.

Experienced plaintiffs' firms in this space track their time carefully and know exactly what their fee demand will look like at various stages of litigation. Defense counsel should be doing the same analysis. A case that could have resolved at mediation for $35,000 in vehicle restitution plus $25,000 in fees can easily become a $35,000 restitution plus $90,000 in fees after a year of litigation and a trial. The fee tail often wags the dog in these cases.

When advising your client on settlement authority, frame the analysis in total cost of resolution, not just the vehicle value. Manufacturers who think about lemon law exposure only in terms of the buyback number consistently overpay in the long run.

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Understand the Repair History Before the Mediator Asks About It

The repair history is the factual spine of every lemon law case and the mediator will want to walk through it. Defense counsel should review every repair order before the mediation session, not just the ones that seem relevant to the claimed defect. Look for: whether the same symptom was documented across multiple visits, whether any repair orders reflect the dealer failing to duplicate the concern, whether any visits fall outside the warranty period, and what the cumulative days out of service look like.

If the Tanner presumption applies, meaning four or more repair attempts for the same nonconformity or 30 or more cumulative days out of service under Cal. Civ. Code § 1793.22, know that going in and be prepared to discuss why the presumption is or is not rebutted. Walking into mediation and learning about a fourth repair attempt for the first time is not a position you want to be in.

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The Mediator Is Not Your Adversary

This point sounds obvious but it comes up in practice more than it should. Some defense counsel approach lemon law mediation the same way they approach a deposition: guarded, positional, and reluctant to share information. That approach tends to backfire.

An experienced lemon law mediator has seen hundreds of these repair histories, fee calculations, and penalty arguments. They will have a working sense of where the case sits before the session is over, and positions that are not grounded in the actual record tend not to move the needle. Defense counsel who engage candidly with the mediator, share their genuine assessment of the case, and work collaboratively toward resolution consistently get better outcomes than those who treat the session as another litigation battleground.

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Come With Authority

Few things derail a lemon law mediation faster than a defense lawyer who has to make three phone calls to get settlement authority increased. Plaintiffs' counsel knows what the case is worth. The mediator knows what similar cases have resolved for. If your client has not given you realistic authority before the session starts, you are not ready to mediate.

Work with your client in advance to establish a settlement range that accounts for restitution, the realistic penalty exposure, and the projected fee award. Then come prepared to use it.

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Song-Beverly mediation rewards preparation. Defense counsel who do the math in advance, assess penalty exposure honestly, and engage with the process in good faith consistently resolve these cases at better numbers and with less total cost than those who treat mediation as a procedural box to check.

If you are preparing for a Song-Beverly mediation and want to discuss how the process works or what to expect from the session, we are happy to help.