Most Song-Beverly cases settle. The ones that do not tend to be instructive, and not always in the way the parties expected when they decided to try the case. Lemon law trials are relatively rare precisely because the economics of litigation under the statute make trial a genuinely unattractive outcome for both sides. That calculus is worth understanding clearly, because the lawyers who understand it make better decisions about when to settle and when to fight.
The Obvious Costs First
Before getting to the hidden costs, it is worth briefly acknowledging the obvious ones. Trial preparation in a Song-Beverly case involves expert retention, exhibit preparation, witness coordination, and substantial attorney time. For defense counsel billing hourly, that cost accrues directly to the client. For plaintiffs' counsel working on contingency, the cost is time that could be spent on other files.
Neither of those is surprising. What tends to surprise practitioners, particularly those handling their first few lemon law trials, is how significantly the less visible costs can exceed the direct litigation expenses.
The Fee Award Looks Different Depending on When You Settle
Song-Beverly's mandatory fee-shifting provision requires that a prevailing buyer receive an award of attorney's fees and costs. Cal. Civ. Code § 1794(d). How much that award amounts to depends heavily on when the case resolves, and the AB 1755 framework has added a new wrinkle to that analysis.
For cases subject to the new procedures, pre-mediation work is structurally limited to initial disclosures and one two-hour deposition per side. Cal. Code Civ. Proc. § 871.26(b)-(c). Manufacturers have taken notice. Many are now arriving at early mediation with fee arguments calibrated to the constrained pre-mediation workload, pushing for lower global settlements on the fee component or, in some cases, insisting that fees be resolved by noticed motion after the vehicle restitution is agreed upon rather than negotiated as part of the overall resolution.
For plaintiffs' counsel, that dynamic creates a real strategic tension. A bifurcated approach, where vehicle value settles at mediation and fees are litigated separately, protects the full lodestar recovery but adds time, uncertainty, and cost. A global resolution that packages fees into the settlement provides certainty but may mean accepting a number below what a motion would produce. Courts calculate fee awards using the lodestar method, and experienced plaintiffs' firms bill at rates courts have consistently found reasonable. See Serrano v. Priest, 20 Cal. 3d 25, 48-49 (1977). Whether that number is better secured through negotiation or motion is a case-by-case judgment call that counsel should think through before the mediation session starts.
What does not change under either framework is what happens when a case goes all the way to trial. The same case that reaches early mediation with a modest fee record can generate $150,000 or more in fees through summary judgment, pretrial motions, and a jury trial. Defense counsel who model total cost of resolution as buyback value plus a capped mediation-stage fee are making an assumption that holds only if the case actually resolves at mediation. If it does not, the fee meter runs without a ceiling.
The Civil Penalty Cuts Both Ways Under Pressure
The civil penalty provision of Cal. Civ. Code § 1794(c) allows a jury to award up to two times actual damages if it finds the manufacturer's failure to comply was willful. In a $40,000 vehicle case, that is a potential $80,000 penalty on top of restitution and fees.
Defense clients often treat the civil penalty as a negotiating chip rather than a real risk. That is a mistake when the documentary record contains technical service bulletins that address the consumer's symptoms, or prior warranty claims on the same vehicle. See Oregel v. Am. Isuzu Motors, Inc., 90 Cal. App. 4th 1094, 1104-05 (2001). Juries that hear about internal manufacturer documents acknowledging a known defect while the consumer was being told the vehicle was repaired tend to react predictably.
For plaintiffs, the penalty is also not guaranteed. Willfulness is a jury question, and juries do not always find it even in cases where the documentary record looks favorable. Betting the resolution of a case on a civil penalty that a jury may or may not award is a form of risk that mediation eliminates.
Opportunity Cost Is Real
This one rarely appears in any client memo, but it is one of the most significant costs of lemon law trials for both sides.
For defense counsel and their clients, a lemon law trial ties up in-house resources, risk management attention, and outside counsel capacity for weeks. Manufacturers with active California litigation portfolios know that each trial carries an opportunity cost measured in cases that do not get the attention they need.
For plaintiffs' firms that handle volume Song-Beverly practice, a trial consumes the lead attorney's time completely during the trial period. Cases that could have been resolved during that window accumulate. The economics of a contingency-fee lemon law practice are built around efficient resolution, and trial disrupts that model in ways that extend well beyond the immediate case.
Appeals Extend the Timeline and the Exposure
Song-Beverly cases do not always end at the trial court level. Both sides have appealed adverse verdicts, and the California Court of Appeal has an active body of lemon law jurisprudence as a result. An appeal adds one to three years to the resolution timeline, continues to accrue attorney's fees on the plaintiffs' side in cases where the appeal is unsuccessful, and defers any recovery for the consumer.
For defense clients, an unsuccessful appeal after a plaintiff's verdict can result in a fee award that includes appellate fees on top of the trial court award. Courts have upheld substantial post-judgment fee awards in Song-Beverly cases where manufacturers pursued unsuccessful appeals. The decision to appeal a lemon law verdict deserves the same economic analysis as the decision to try the case in the first place.
The Intangible Costs Are Not Zero
Trial involves real people giving testimony under oath in a public proceeding. For consumers, that means reliving a frustrating experience in a formal setting with no guarantee of outcome. For manufacturers, it means corporate representatives being cross-examined about internal documents, warranty policies, and repair decisions in front of a jury.
Neither side emerges from a contested lemon law trial without some cost that does not appear on a billing statement. The consumer who waited three years for resolution while the case litigated to verdict paid a price in time and stress that no damages award fully compensates. The manufacturer whose internal TSBs were read aloud in a courtroom paid a reputational cost that is difficult to quantify.
None of this means lemon law cases should never go to trial. Some cases involve genuine legal disputes that need resolution, and trial is the appropriate venue for them. But for the majority of Song-Beverly disputes, where the facts are documented, the damages are calculable, and the fee exposure grows every month the case remains open, the costs of trial on both sides consistently exceed what a mediated resolution would have required.
If you have a lemon law case approaching trial and want to explore whether mediation is still a viable option, we are glad to discuss it.
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