Settlement vs. Trial in NJ Lemon Law Cases

The overwhelming majority of NJ Lemon Law court cases settle before trial. NJ’s mandatory § 56:12-42 Lemon Law fees + mandatory CFA § 56:8-19 treble damages + mandatory CFA fees drive most cases to resolution.

Why most cases settle

Manufacturer incentives

• Avoid trial costs ($100,000-$250,000+).
• Avoid adverse CFA findings that affect future cases.
• Avoid mandatory § 56:8-19 trebling (automatic on any CFA violation).
• Avoid dual mandatory attorney-fee escalation.
• Avoid uncertainty.

Consumer incentives

• Faster resolution.
• Certain outcome.
• No witness preparation burden.

The cases that actually go to trial

1. Disputed CFA application (whether the conduct rises to “unconscionable commercial practice”).
2. Strong defense theory (e.g., “customer-caused damage” or “no nonconformity”).
3. High-value vehicles ($100K+) where settlement gaps are large.
4. “No defect found” cases where manufacturer cannot reproduce.
5. Disputed certified-mail notice timing.
6. Stubborn manufacturer or consumer.

What the consumer risks at trial

A trial loss yields zero recovery. NJ’s § 56:12-42 attorney fees apply only on prevailing — but they’re mandatory if you do prevail.

What the manufacturer risks at trial

• Defense costs.
• CFA § 56:8-19 mandatory treble damages.
• § 56:12-42 mandatory Lemon Law attorney fees + expert fees.
• CFA § 56:8-19 mandatory attorney fees.
• Magnuson-Moss fees.
• Adverse precedent in NJ Superior Court Law Division.

Settlement structures in NJ

• Cash refund under Lemon Law § 56:12-42.
• Cash-and-keep (negotiated, not statutory).
• Replacement vehicle.
• Mixed — partial cash + replacement.
• CFA-loaded settlement — Lemon Law refund minimum, with significant CFA damages and dual fee payment as the deal’s value.

DCA arbitration vs. court settlement

DCA Lemon Law Unit arbitration produces a fixed-format Lemon Law remedy with no fee component. Court settlements can structure value across refund, CFA mandatory treble damages, mandatory § 56:12-42 fees, and mandatory CFA § 56:8-19 fees — providing the consumer’s attorney with the fee component that funds the practice.

Bottom line

Most NJ Lemon Law cases settle. A reasonable settlement at full statutory exposure — mandatory dual fees + mandatory CFA trebling — is generally the right outcome. The CFA mandatory fee mandate combined with mandatory § 56:12-42 fees and mandatory expert-witness fees is among the strongest drivers of settlement in the country.

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