Warranty and recall

Overview

Since 2014, the number and size of warranty and recall claims has risen at an accelerated pace – a trend that today is compounded by the increasing amount of technology in vehicles. Original equipment manufacturers (OEMs) are becoming more aggressive with the scope of warranty and recall claims, and are increasing efforts to recover more costs from their supply base. And it’s not just the actual costs either. An OEM will attempt to recover profit on behalf of itself for warranty or recall parts, and on behalf of its dealer network for repairs costs.

Given the changing priorities of OEMs, specialized legal advice on warranty and recall disputes is particularly important.

McDonald Hopkins has decades of experiencing offering a full range of warranty and recall legal services – including analysis, negotiation, and litigation – to the automotive and aerospace industries. Our team has represented clients in disputes with practically every OEM and has successfully resolved or litigated hundreds of millions of dollars in warranty and recall claims.

In order to successfully mitigate or avoid warranty and recall claims, we find it is important to be involved on the front end of any such actual or threatened claims, including any associated investigation. This assists in properly documenting suppliers’ positions. With the complicated nature of automobiles, it is often difficult to discern the true cause of a warranty claim or recall, and OEMs are quick to pass costs associated with such claims to their supply base. These costs need to be reviewed and disputed, particularly where there are potentially multiple causes of the warranty claim or recall. When involved on the front end of such investigations we can help our clients mitigate or eliminate liability.

Our team also assists suppliers with practically every other legal need including contract review and negotiation, supply chain disputes, interaction with NHTSA and supply interruptions.

Suppliers need to understand how to minimize the scope of any recall, and reduce the financial exposure. The identification and minimization of the impacted vehicles or parts can dramatically reduce financial exposure, and create good defenses to any subsequent claims. Additionally, given the complicated nature of vehicles, there are often multiple actual or potential contributors to a warranty or recall claim, and all
of these causes need to be carefully considered and investigated from a liability and cost prospective.