Running a Shop

Whose Fault Is It Anyway?

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A customer came into an auto shop wanting an engine swap, presenting an obviously damaged engine from a salvage yard. The shop told the customer it was unsafe and warned him not to put it into his car. 

The customer ignored the advice, and the shop installed the junkyard engine. 

A short time later, the customer’s car went up in flames on the freeway. While he escaped with no physical injuries, he sued the shop for negligence with claims of severe psychological distress, including insomnia, nightmares, flashbacks, and anxiety. 

Without clear documentation of the shop encounter, the business’ owner likely will have to pay the customer thousands of dollars to settle the case. 

This actual lawsuit, being litigated in California, is an example of why William D. Ferreira, an attorney with Automotive Defense Specialists, urges shops and technicians to refuse to release vehicles deemed immediately unsafe on roadways. Or, as in the above case, to decline the job.

“You can tell a customer you’re just not willing to do it–they need to call a tow truck to take it home or to another shop,” says Ferreira, whose firm has offices in San Francisco and Los Angeles, California. “The risk of losing one angry customer who may go out and kill someone is far less than the potential liability you could face for trying to keep a customer happy.”


Learn to Keep Detailed Records

On a daily basis, auto shops encounter customers who decline major or minor safety-based repairs for their vehicles, whether for financial reasons, time constraints, or skepticism that a problem even exists. 

While laws vary by state, any shop will be vulnerable to litigation if they don’t document each step of an interaction, attorneys say: the diagnosis and how it was made, the recommended fixes, and all written and verbal conversations on the decision process and the dangers of driving without those repairs.  

Each auto technician and shop will have a different risk tolerance level for what defects they consider imminently dangerous, versus serious and in need of fixing within a certain time period. Gray areas exist between, say, metal-on-metal pads on front rotors and low rear shoes. 

If a shop opts to release a vehicle but has uncovered a significant issue, Ferreira recommends having customers sign a strong disclaimer before they leave. 

His suggested warning: “I have been informed and understand Shop X’s position that failure to correct this issue could put myself, my passengers, and other vehicles at risk on public streets and highways. These recommended repairs are for the safe operation of the vehicle. Failure to address these issues described herein may render this vehicle unsafe to operate on public streets and highways. Shop X is stating unequivocally that the vehicle, as is, is unsafe and should not be driven until such issues are corrected.”

“Therefore, future allegations that the shop ‘never told me’, or ‘I had no idea’, or ‘The mechanic must have done something to my car’ are nonsense,” he explains. “Documentation protects the shop from allegations of negligence or failure to inform.”  

Auto shops should think of repair orders as the equivalent of medical records in a doctor’s office, adds Steven L. Simas, an attorney with Simas & Associates, Ltd., in Sacramento, California. Simas specializes in administrative law and license defense cases, including those involving the California Bureau of Automotive Repair. 

Like medical practices, shops can protect themselves from potentially devastating liability by investing in computerized systems that organize and store information on intake and repair orders. Those systems allow for quick access in case of a dispute. 

Shop owners also should hire enough staff to avoid cutting corners on that administrative work, which unfortunately has been a struggle exacerbated by the COVID-19 pandemic. 

“My advice is always to document more than the law requires,” Simas says. “Even if you call a customer a few times and don’t get an answer, I’d write that down. Create a thorough history in documents that a third-party stranger can read and understand.”

And be very detailed on guidance given, Simas continues: “You might write, ‘Advised customer the front brake system is about to fail, and that this vehicle should be driven no more than (this) number of miles or (this) time period without replacing (this and that) part.’” 

Like Ferreira, Simas believes shops should feel empowered to say no if they don’t want to work on a vehicle without an agreement in place on certain repairs. “There’s no law that says you have to take every customer,” he notes. “You can fire a customer. I think that’s something a lot of shop owners don’t think about.” 


Understanding Outcomes

Laws and court systems tend to favor the consumer, attorneys caution. Ferreira’s experience in small claims court, for instance, is that 90 to 95 percent of judges will rule in favor of a plaintiff if a vehicle breaks down shortly after a shop visit, even if a shop owner does nothing negligent. Most simply lack proof that the customer refused to address necessary problems.   

Another consideration is that even if a customer signs a liability release form, a passenger or other driver injured or killed in a subsequent accident could still draw a shop into a lawsuit over an unsafe vehicle because they never assumed the same risk.   

“They can still say that the shop negligently entrusted this vehicle onto the roads and that’s why they’re suffering or facing medical expenses,” Ferreira notes. “Every shop owner thinks, ‘That’s not going to happen to me’–until it does. Do everything you can to protect yourself.”

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