The Truth About Attorney’s Fees in Lemon Law Cases

Clearing Up Common Misconceptions So You Know Exactly What to Expect

Introduction

If you’ve been researching your rights under the lemon law, you’ve probably seen bold claims like:

• “The manufacturer pays all attorney’s fees.”
• “You’ll never pay anything—guaranteed.”
• “Lemon law cases are completely free.”

While these statements sound reassuring, they don’t always tell the full story. The reality is more nuanced—and understanding it can help you make smarter decisions about your case.

Myth #1: The Law Guarantees the Manufacturer Pays All Attorney’s Fees

Many state lemon laws say that if a consumer prevails, the manufacturer “shall” pay reasonable attorney’s fees. Federal warranty law, however, says fees “may” be paid.

That distinction matters for this reason:

• “Shall” suggests mandatory payment—but only after a legal victory
• “May” means it is discretionary—after a legal victory

This is called a “fee shifting” provision in the law and it is available in very few areas of the law, with lemon law being one of them.

But here’s the key point most people miss:

The only way to force a manufacturer to completely comply with these fee-shifting provisions is when they are enforced by a judge (or arbitrator) typically after a trial or court ruling. Prior to that happening, the manufacturer is denying responsibility and the matter is contested. Any resolution is simply a negotiation using the law merely as a guide to what’s fair and reasonable. And that leads to the next important reality…

The Reality: Most Lemon Law Cases Never Reach That Stage

Over 99% of lemon law cases settle before trial or any kind of final court ruling or judgment.

That means:

• There is no judge or arbitrator deciding attorney’s fees in most cases
• What the law says about fees becomes a matter of negotiation—not entitlement

Here’s How Settlements Actually Work

In real-world settlements, manufacturers often structure offers in ways that often differ from what consumers expect or even what the law says.

Cash Settlements

Manufacturers commonly offer a lump sum payment with:

• No breakdown of attorney’s fees (they say the lump sum offer is inclusive of fees)
• No strict allocation between client and attorney of damages vs. fees

They expect the client and attorney to divide the funds between themselves, typically per their attorney-client agreement.

Buyback or Replacement Settlements

When a manufacturer offers to repurchase a vehicle, they may:

• Include a separate amount labeled as attorney’s fees (the rest of the money is usually clearly labeled as reimbursement for payments made by the consumer and payment to the lienholder to pay off the loan). They know if they don’t include anything for attorney’s fees, the case isn’t likely to settle, so they commonly add fees to the offer.

The number for attorney’s fees commonly has no connection to the firm’s actual rate(s), seniority or skill level of attorney, time spent, speed or qualify of result or value created. This number is often arbitrary and may be the same amount they have been offering for 30 years with almost no increase for inflation!

Why This Matters to You

At this point, you (the client) are faced with a decision if the amount offered doesn’t cover all the fees:

• Accept the offer (which may require contributing part of the total recovery toward fees), or

• Reject the offer and continue fighting—often over attorney’s fees themselves

This creates a dynamic that many consumers don’t anticipate.

Manufacturers sometimes structure offers in ways that create tension between client and attorney, which can stall or even end the case, benefitting them

Myth #2: “Manufacturer Pay’s Fees” Means You Will Never Pay Anything

You’ve likely seen firms advertise:

• “No fee ever”
• “100% free representation”
• “The manufacturer pays all fees”

These statements are often over-simplified marketing language.

What’s usually true:

✔ You won’t need to pay any money out-of-pocket

What’s often misunderstood:

❌ It does not always mean no portion of the fees ever come from the total money recovered

Understanding “Out-of-Pocket Fees” vs. “Fees Paid From the Total Recovery”

There is a fundamental difference between paying a lawyer from the total winnings and paying as an out-of-pocket expense:

1. The Source of the Funds

Out-of-Pocket: The money comes from your existing assets—your savings, your paycheck, or a credit card. If you don’t have the money, you can’t hire/pay the lawyer.

Portion of Recovery: The money comes from “new” money—the award the lawyer won for you. You are essentially sharing a piece of the “prize” rather than spending your own earnings/savings.

2. The Timing (Pre-payment vs. Post-payment)

Out-of-Pocket: You pay upfront or as the work happens. You are writing checks while the case is still active, regardless of whether you’ve seen a dime in results.

Portion of Recovery: You pay at the very end. The money never actually leaves your personal bank account because it is deducted from the settlement check before it’s even handed to you.

Attorney-Client Agreements Control the Fees

Another key point:

Law firms are allowed to structure their fee agreements however they choose—as long as they are ethical and clearly disclosed.

This means:

• The agreement you sign with your attorney controls how fees are handled
• Not the advertising
• Not even what “the law provides” in the event of a successful verdict at trial

None of This Means You Shouldn’t Pursue a Lemon Law Case!

It’s important to be clear about something:

None of this is a reason to avoid pursuing a lemon law claim!

In fact, for most consumers, it still makes complete sense to move forward.

For the vast majority of lemon law firms like us:

• You pay nothing upfront
• You owe nothing out of pocket during the case
• And most importantly — If there is no recovery, you owe nothing at all

That means the law firm is:

• Investing its time
• Advancing its resources
• Taking on the risk of a legal battle against a large manufacturer

All while only getting paid if there is a successful outcome you agree to.

And despite everything discussed above, there is still a very strong chance the manufacturer will pay all of the attorney’s fees as part of a settlement.

Be Prepared to Make an Informed Decision if Needed

That said, in some situations, the manufacturer may:

• Offer less in attorney’s fees than what the Firm is contractually owed, or
• Structure the settlement in a way that doesn’t fully account for all fees

If that happens, you may need to make a decision:

Option 1: Accept the Settlement

• Resolve the case now
• Receive your compensation and
• Allow the firm to take a small portion of the total recovery to cover any shortfall in fees under the agreement you signed

If you do not agree, then you can pick…

Option 2: Continue the Fight

• Push for additional compensation or fees or
• Proceed with arbitration or litigation (filing a lawsuit) and
• Accept the time, delay, and uncertainty that comes with it

This isn’t a trick—it’s simply how negotiations work in legal matters involving large companies where there is a fee-shifting provision in the law.

The key takeaway is this:

• You are not paying out of pocket
• You are not taking a financial risk if the case is unsuccessful
• And you remain in full control of whether to accept any settlement

Sometimes the best outcome is resolving the case relatively quickly and painlessly—even if it means a small portion of the total recovery goes toward fees—rather than extending the fight with no guaranteed improvement.

The most important thing is that you understand your options and make the decision that is right for you.

The Bottom Line

Lemon law cases are legal battles against large manufacturers. Outcomes are negotiated, fees are negotiated, and settlement structures are negotiated.

Understanding these realities allows you to make informed decisions and choose the best path forward.

Don’t Delay – Take Action Now For Free!

Get a Free, No Obligation, Confidential Consultation today.

Call the 60-Second Lemon Law Assessment™ Hotline at 1-888-LEMONS-1 or submit your information online to find out if you qualify in about 60 seconds.

You don’t pay anything unless there is a recovery you agree to. We only succeed when you succeed.