Attorney Fees in New York Lemon Law Cases

New York is one of the few states with statutory attorney-fee shifting built directly into the Lemon Law itself. GBL § 198-a(l) provides that a court may award reasonable attorney fees to the prevailing consumer in New Car Lemon Law cases. The parallel § 198-b(k) provides similar shifting for Used Car Lemon Law cases.

Combined with § 349(h) and Magnuson-Moss § 2310(d)(2), New York provides three independent attorney-fee shifting hooks — placing it alongside California as one of the most fee-friendly lemon-law jurisdictions.

Three statutes, three approaches to fees

Statute	Attorney fees	Where pursued
§ 198-a(l) New Car Lemon Law	Statutory; discretionary but routinely awarded	NY Supreme Court
§ 198-b(k) Used Car Lemon Law	Statutory; discretionary but routinely awarded	NY Supreme Court
§ 349(h)	Statutory; routinely awarded	NY Supreme Court
Magnuson-Moss § 2310(d)(2)	Federal; routinely awarded	Federal or state court

Note: AG arbitration does not include attorney-fee recovery. For fee shifting, court action is required.

GBL § 198-a(l) — the New Car Lemon Law fee provision

Section 198-a(l) provides:

A court may award reasonable attorney’s fees to a prevailing plaintiff… If a consumer prevails in any action under this section, the consumer shall be allowed by the court to recover as part of the judgment a sum equal to the aggregate amount of costs and expenses determined by the court to have been reasonably incurred by the consumer in connection with the action.

In New York lemon-law cases, attorney-fee awards typically range:

• Settlement cases (most): $25,000-$60,000.
• Tried cases: $60,000-$200,000+.
• Complex cases with extensive discovery: $100,000+.

These amounts are paid by the manufacturer in addition to the consumer’s damages.

GBL § 198-b(k) — the Used Car Lemon Law fee provision

Mirrors § 198-a(l) for Used Car Lemon Law cases. Same lodestar calculation, same paid-by-manufacturer structure.

§ 349(h) — the Consumer Protection Act fee provision

Section 349(h) provides attorney fees for the prevailing consumer in § 349 actions. Same general framework.

Magnuson-Moss federal fee provision

15 U.S.C. § 2310(d)(2) provides federal-court attorney-fee recovery — discretionary but routinely awarded.

How fee-shifting changes New York case dynamics

Without fee-shifting, New York lemon-law cases would be economically problematic:

• Case value (refund + damages) may be $30,000-$70,000.
• Legal fees through trial could exceed $60,000.
• Consumer net: minimal or negative.

With § 198-a(l) + § 349(h) + Magnuson-Moss fee-shifting:

• Refund: $30,000-$70,000.
• § 349 actual damages: similar.
• Attorney fees: paid by manufacturer.
• Consumer net: substantial recovery, no out-of-pocket legal cost.

Contingency representation in New York

Most experienced New York lemon-law attorneys work on modified contingency:

• No fee upfront to the consumer.
• Costs advanced by the attorney.
• Fees recovered from the manufacturer through § 198-a(l), § 349(h), or Magnuson-Moss.
• Backup percentage of recovery in some agreements.

Read your fee agreement carefully.

What courts look for in fee awards

When manufacturers contest fee amounts, New York courts focus on:

• Hourly rates consistent with NY legal market rates.
• Time entries for reasonable necessity.
• Duplication issues.
• Case complexity.
• Results obtained.

Reductions are typically modest (10-25%).

Why manufacturers don’t fight fees aggressively

Defense counsel’s incentive is to settle before fees accumulate. Multiple fee-shifting hooks make litigation expensive for the manufacturer.

What about the AG arbitration?

AG arbitration doesn’t include attorney-fee recovery. If you’re pursuing only AG arbitration, you’re on your own for legal costs.

This is why many New York lemon-law cases involve both tracks — AG arbitration for the substantive refund + civil-court § 349/§ 198-a(l) for fees.

Even when AG arbitration resolves the refund amount, the parallel civil-court case continues to recover fees and damages.

The settlement breakdown

A typical settled New York lemon-law case might distribute:

• Refund value (paid to consumer or lender): 50-65%.
• § 349 damages: 15-25%.
• Attorney fees and costs: 15-25%.

The consumer’s recovery is the first two components; attorney fees go directly to the lawyer.

Bottom line

New York’s four-statute framework — § 198-a New Car Lemon Law (refund) + § 198-b Used Car Lemon Law (used dealer warranty) + § 349 (damages and treble) + Magnuson-Moss (federal fees) — creates one of the most comprehensive consumer protection packages in the United States. The statutory attorney-fee shifting in the Lemon Law itself (rare among states) plus the parallel § 349 and Magnuson-Moss fee recovery makes New York competitive with California’s framework.

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