Congress Moves Against Dealer-Consumer Arbitration

The House of Representatives Judiciary Committee's Subcommittee on Commercial and Administrative Law has passed H.R. 5312, the Automobile Arbitration Fairness Act of 2008 - a bill that would prohibit auto dealers from using binding arbitration to settle disputes with car buyers.

Pertaining to lemon laws, current legislation permits car dealers to have customers sign away rights to pursue specific claims in court.

H.R. 5312 is a long way from becoming law, due to the partisan split over the legislation; Democrats favor the bill while Republicans oppose it. Due to the split, it is unlikely that the bill will become law in 2008.

California Assembly OKs Crash Parts Bill

The California State Assembly has passed Assembly Bill No. 2825, the Automotive Repair Crash Parts bill. This bill would require automotive repair dealers, upon the customer's request, to provide invoices from distributors, dealers or manufacturers of crash parts installed that exceed $50.

Another requirement of the bill is that the first page of the written estimate states that it is illegal to install parts not described to and approved by customers. If signed by Gov. Arnold Schwarzenegger (R), the bill would become effective Jan. 1, 2010.

Massachusetts House Passes Anti-Steering Bill

The Massachusetts House of Representatives passed House Bill 5056 for Damaged Motor Vehicle Repair. The bill requires insurance companies to hand out manuals provided by repairers, that insurers provide alphabetized lists of all repair shops in particular areas, and that insurance companies are banned from insuring repairs for a specific shop.

The state will also administer a market conduct study of the direct payment and referral repair shop plans by insurers no less than every three years with an initial study no later than Dec. 31, 2009.

Rhode Island Court Rules in Favor of Labor Rate Survey

A Rhode Island Superior Court judge made a ruling in the court case of Auto Body Association of Rhode Island (ABARI) vs. the State of Rhode Island Department of Business Regulation (DBR).

The decision states that all insurance carriers authorized to sell motor vehicle liability insurance in Rhode Island would be required to conduct a labor rate survey. The data compiled would act as the sole determinant of the prevailing auto body labor rate.

California Senate Passes Paint Capping Bill

California Senate Bill 1371, titled Insurance Automobile Repair Capping, has been passed by the California State Senate, but is now pending on the signature of the governor.

Senate Bill 1371 would prohibit insurers from capping paints and materials charges that are accepted by automobile repair shops, unless the repairer and insurer voluntarily agree on pricing. Otherwise, there is a standard formula for calculations.

Currently, California's governor refuses to sign all bills unrelated to the state budget.

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