KRS § 367.865 — KY Code / Title XXIX / Chapter 367 / Section 367.865
367.865 Informal dispute resolution system
Status: in_force

367.865 Informal dispute resolution system.

(1) Effective January 1, 1983, each motor vehicle manufacturer shall offer to the buyer

a comprehensive informal dispute resolution system. By transacting business in the

Commonwealth of Kentucky, each manufacturer is deemed to have voluntarily

consented to participate in the system. Each system shall operate pursuant to written

rules and procedures which:

(a) Ensure that the system is impartial, accessible to the buyer, and expeditious,

and shall operate at no cost to the buyer;

(b) Provide that if the buyer elects to submit the dispute to the system, the

manufacturer shall not refuse to submit the dispute to the system as long as the

subject of the dispute occurred during the first two (2) years or twenty-five

thousand (25,000) miles, whichever occurs first, of the buyer's ownership of

the motor vehicle involved in the dispute;

(c) Provide that the system shall provide for an oral hearing, unless the buyer

agrees in writing that the system shall render a decision based solely on

documents submitted to it;

(d) Shall include, but is not limited to, procedures for informing the buyer of the

existence of the system, preparing the agreement between the buyer and the

manufacturer whereby the dispute may be submitted to the system, selecting

the members of the decision-making panel, notifying the parties of the

complaint, investigating the complaint, providing for hearings, rendering a fair

and expeditious decision, and informing parties of the decision.

(2) The decision of the system shall be legally binding on the manufacturer. The

decision of the system shall not be legally binding on the buyer, unless the

manufacturer elects to have its system binding on all buyers who submit their

disputes to the system. If the system is to be binding to both parties, the written

agreement between the buyer and the manufacturer whereby the dispute is

submitted to the system shall include in conspicuous, bold-faced type the following

statement:

"YOU SHOULD REMEMBER THAT BY ENTERING INTO THIS

AGREEMENT YOU ARE DECIDING TO USE THIS DISPUTE

RESOLUTION SYSTEM TO SETTLE YOUR DISPUTE INSTEAD OF

GOING TO COURT. AFTER A DECISION BY AN ARBITRATOR,

NORMALLY A COURT WILL REFUSE TO HEAR THE FACTS IN A

CASE IN ALL BUT THE MOST UNUSUAL SITUATIONS. YOUR

SIGNATURE IS REQUIRED IMMEDIATELY BELOW TO INDICATE

THAT YOU HAVE READ THIS DISCLOSURE.

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SIGNATURE OF BUYER

(3) Before a dispute may be submitted to a system which is legally binding on both

parties, the buyer shall sign the disclosure statement required by subsection (2) of

this section.

(4) Each manufacturer shall take steps reasonably calculated to make the buyer aware

of the existence of the system at the time the dispute arises.

(5) Each manufacturer shall take all steps necessary to ensure that the system is

sufficiently insulated from the manufacturer so that the decisions of the system are

not influenced by the manufacturer. The system's decision-making panel shall be

composed of members at least fifty-one percent (51%) of whom have no

involvement in the manufacture, distribution or sale of motor vehicles. No member

deciding a dispute shall be a party to the dispute; nor shall any member deciding a

dispute be an employee or agent of a party to the dispute, unless solely for the

purpose of impartially deciding disputes.

(6) Nothing herein shall prohibit the manufacturer from participating in a system

sponsored or administered by an impartial third party having no direct involvement

in the manufacture, distribution, sale, or service of motor vehicles.

(7) Each dispute resolution system shall provide to the office of the Attorney General,

upon request, the name and address of each buyer whose complaint is resolved

through its system. The Attorney General shall have the authority to monitor each

dispute resolution system as well as review the records on each complaint, upon

request. An annual report shall be prepared and published by the office of the

Attorney General evaluating the performance, effectiveness, and benefits of the

system, and shall include in this report recommendations for continuing, modifying,

or terminating the requirement of this section.