AUTOMOBILE RECALLS: The Rights of Owners

Foreword

As automobiles become ever more complex, recalls, whether self-imposed or directed by the Government, are statistically multiplying each year. Legislatures and Courts are responding to that. And many manufacturers are voluntarily expanding their compensation measures and packages to protect their reputation and market and is the custom, these voluntary actions are becoming "Custom and Usage" that establishes precedent and Law. Figures also show that publicized recalls can deeply effect sales, not merely of a model implicated but the entire line of the manufacturer involved. And regulatorily speaking, deliberately hiding the existence of a defect from buyers and the public has moved into the realm of criminal responsibility for those making such a decision.

Most owners are confused as to their legal rights. Their biggest danger is listening to non-professionals advice on amateur automobile forums. See Note They are lead to believe that the manufacturers' liability for defects, both hidden or apparent (legal terms), ends with the warranty the manufacturer decides upon. That has never been fact. One cannot limit regular civil liability by a manufacturer's decision on the warranty period and "hidden defects" can extend for decades. Of course, different jurisdictions handle it in mildly different ways, with varying terminology and use different remedial procedures but as the automobile industry is a global one, the general principles are the same. There has been a birth of a specific field specialty within the law in the last 2-3 decades. I suggest one ignores advice on forums and do a detailed web search to find the nearest specialist. Do not be concerned with costs. The field is a sub-division of the Class Action industry. In many jurisdictions the fees of class actions are paid for by the State and/or the field is so lucrative that professionals in it will do the preliminary work on speculation only. I recommend one consult with a local source rather than amateurs. It should also be noted that the position as to owners rights in a recall varies from jurisdiction to jurisdiction.

NOTE: It is a common trait of many collector car owners to protect the relevant marque AT ALL COSTS. They mistakenly assume that this  attitude expresses their loyalty to the marque and abandon any loyalty to their fellow owners. They could not be more wrong. Aside from rejected the truth, never a good idea, they do a long term disservice to the marque they are mistakenly trying to protect. The biggest incentive to excellence is reality. If its market denies that to the manufacturer, the marque inevitably goes into decline. In an ideal world., the market helps improve the market, not cover up defects and their consequences.

Some common recalls:

- Brake and gas pedal defects, such as pedals getting stuck/jammed or hydraulic issues
- Safety equipment defects, such as safety belt or airbag failure
- Fuel, exhaust, and cooling system flaws
- Misaligned steering mechanisms
- Structural problems in the frame, body, transmission, or engine assembly
- Electrical and computer problems
- Accessory and option defects such as heated seats that can burn occupants

Defects are most often regulatorily divided into those that require attention at the owner's convenience or those that are considered dire enough to present a potential immediate danger. Recall regulations for different types of recalls can be vastly different and can go so far as to implicate OWNER liability, if it can be proven they were informed. For example, if an informed owner, told to immediately stop driving the subject vehicle, is involved in an accident they caused related to the recall reasons, that could be considered criminal recklessness in some countries. That being said, a good faith assumption that they have followed a prudent path (with recognized experts and alternative parts) the rectify the manufactured-indicated issue, will eliminate the element of criminal negligence and shift any liability to the
 
a. expert installer
b. replacement part manufacturer
c. your car insurer
failing any specific provisions to the contrary in the relevant jurisdiction. In this regard, it is absolutely imperative for the car's manufacturer to be completely open and quickly forthcoming with ALL information. Anything less prejudices their buyers and solutions.

WATCHPOINT: It should be a given that vehicle manufacturers have more political clout in some countries than consumers. Yet I am simple man with 100,000s of miles on my cars. The surest sign that I should not trust a component or its manufacturer is that it fails...even once. I stopped replacing parts with the same thing or from the same manufacturer (where is the logic in that?!!)  decades ago and have had a more reliable and safer life since. Almost all vehicle components are made by many manufacturers and different manufacturing areas with different sub-suppliers, most often all with long trouble-free histories. Why take a risk on something new from a producer who has proven themselves capable of producing defective components? On the other hand, it is the cheapest solution for a car manufacturer to use something from the same faulty component supplier to mitigate their inconvenience and outlay. If they want to send me something, I will put it on the shelf or sell it and install something more trustworthy..preferably from another manufacturing area and a tried and true component. I refuse to be just another sheep. Life is too short and the world is full of great automobile components.

Can the Manufacturers' Liability be Limited by their Recall Provisions or Recall Legislation?

Off hand, NO! No more than a time limited warranty can limit the liability for hidden defects. And you are not bound to the solution decided by  the Manufacturer. These are normally:

• Repair:   The manufacturer will repair the defect free of charge. This commonly occurs for small, easily fixed defects.
• Replace: The manufacturer will replace your car or equipment free of charge.
• Refund:   The manufacturer will refund your purchase (minus a certain amount for depreciation). Refunds are only available for car recalls; manufacturers of car equipment are only required to repair or replace defective equipment.

What are the Other Heads of Damages From a Recall?

This area is expanding continually, though it varies from jurisdiction to jurisdiction.

• Damage Caused by the Defect:   The manufacturer can be held liable for any direct damage caused as a consequence of the existence of the defect, damage to third party property, physical damage caused to the owner, the vehicle occupants or to third parties
• Loss of Usage: The manufacturer must compensate the owners for the loss of Usage of the Vehicle. A key case is that of Honda, who voluntarily paid a per-diem to owners of a recalled vehicle.  Many experts believe THIS will be the standard going forward.
  
• Economic Damages: You may be able to recover the lost value of the car’s resale value.
  

Consult your local experts and standards in this area! That is what the internet is all about.

WATCHPOINT :  Defects and recalls are a function of new design, new techniques and new components. We are all aware of that since our birth. I remember my Dad's warning over 70 years ago about how to never buy the first 2 years of a new model's manufacture. So we all walk into most of these things with eyes open. In my case, my first priority is to have a functioning fun and reliable car, not to bring lawsuits or to feel righteously indignant. When faced with an not-unexpected defect of whatever nature, my first goal is to get the thing safely and legally back on the road and assure myself, as best possible, that that same fault will not repeat itself.

WEBMASTER NOTE:  I have been dismayed over the last 25 years to see the reputation of Morgans unjustly change. Expressions of "they all do that" can now be heard constantly from the newer group of owners. This simple fact is that Morgans, up to the mid-1990s, were considered as reliable or better when new as any other marque. The warranty may have been short but it was, in practice,  incredibly generous if/when needed. This only began to change after 1995. There were potent reasons for this: 1. An Aged Morgan Population (cars and owners) The overwhelming majority of Morgans on the road are not new. The average vehicle finds itself in a scrap (break up) yard after 12 years. The average 4-wheeler Morgan on the road would be closer to 40 years. Many suffer a lack of maintenance. Wear takes its toll on all of them as with any machine. Though addressing these issues was once a forte of this Community, it has ended during the present generation of owners AND residual prices are now far beyond the younger and more energetic part of world. The expression of "they all do that" for these generations of Morgans reflects the costs of expert help today and the new owners' relationship to their cars, not inherent defects per se. I imagine the expression relieves feelings that the curatorship is not going well for the lack of care and money. 2. Altered Business Plan: Peter Morgan had a very hard experience discovering the best business plan. He deduced, whether by analysis or fine instinct, that small volume manufacturers cannot follow a path of constant change without great risk and greater cost. Automobile industry magazines state that the minimum number of beta models necessary to achieve a sustainable modification is 5000. That number is small for a normal automobile manufacturer and they can absorb the onerous warranty and compliancy costs involved. Small companies cannot. Peter rightly became wary of any change, to the point of paranoia. That produced the highest relative profits in the MMC's long history by the 1990s. Charles Morgan never understood this and set the company on a wholly new path of constant modification and development, the more so as he achieved greater control. Losses mounted, but one new model or modification after another continued without end. Each attempt to cure defects leads to the risk of new ones. Soon liquidity came from the sale of needed assets garnered over generations and later from huge government grants. Running expenses spiked but change continued unabated. 3. Regulatory Forced Changes As well, even with the traditional (aka "classic) models, changes were forced by new legislation and required new technology, incapable of average owner/dealer repair. As a MMC Chairman once confided to me "we can build reliable trads until the cows come home, but we cannot produce anything more sophisticated than that.". Change became the new Morgan template and that has continued to this day.  Aston Martin and Ferrari minds are not what this company needs. Their experience and training must aggravate the problems. 4. The Work Force. The losses forced extreme measures and cost cutting. The company turned to from a decades-trained work force to a government subsidized one, under official training programs. Expertise dropped. Outsourcing also became part of the new template and the Factory became an assembly plant, a system which also produces more inconsistencies and issues. 5. Warranty Coverage This became a luxury the company simply could not afford. Perhaps the availability of unlimited funding the new owners enjoy will rectify this. Additionally, the wave of new dealers does not have the skills with the older models and the entire network is unfamiliar with the totally new models. The plummet in hands-on skills in the western world makes any repair extremely expensive. SUMMARY The result of obstacles to build quality, minor and wholesale change and ever-more complex technology and add-ons is apparent. I will not dwell on it. One can find  other opinions of today's Morgan forums. Sadly the new owners of the company, with their appointees in control, have embraced this patently unsuccessful path (confirmed by a glance at the Companies House filed Financials since 1999). However, it is sad to see the new Community's acceptance of this along with the new owners misunderstanding of what has and is happening. I have owned three Morgans and traveled 100,000s of miles in them. They ultimately became the most reliable vehicles I have ever owned!