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Overstated marketing paves way for civil decision in B.C., ways to avoid liability exposure

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Business Practices | Legal
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A Facebook ad by a seller in British Colombia that promised a leak-free vehicle is an example collision shops should consider when it comes to liability risk in marketing and advertising that promise pie-in-the-sky perfect repairs.

Why? Because one day after Elizabeth Cordero bought a 2009 Toyota Matrix from Davinder Pal Singh Sethi it began leaking oil. Cordero took her case to an arbitration tribunal to recover what she spent to have the oil leak fixed (nearly $2,100) and to be compensated for the time she didn’t get to drive the vehicle. The Civil Resolution Tribunal (CRT) found Sethi to be in the wrong because of what was stated in his Facebook ad.

The plaintiff was awarded enough to cover the repair bill but denied the $400 she sought for lost time driving the car.

“…[I]n the Facebook ad, the respondent also said the Matrix had ‘NO LEAKS,'” Tribunal Member Christopher C. Rivers wrote in the CRT’s March 17 decision. “While the respondent submits the car may not have been handled properly after purchase, implying the leak happened after the sale. I find this speculative, and given the timing of the leak, unlikely. The applicant provided written evidence of a cracked timing cover only one week after the sale, and I accept the applicant’s undisputed statement about discovering the low oil level the day after purchase. Given how quickly the applicant discovered the oil issue, and the relative speed with which they had it diagnosed by a mechanic, I find the Matrix likely had an oil leak at the time of sale. This means the Facebook ad was inaccurate.

“The respondent made a firm declarative statement to induce potential buyers to purchase the car. I find doing so was a breach of the standard of ‘reasonable care’ not to mislead a purchaser – in this case, the applicant. I find the applicant relied on the clear, unambiguous, and specific statement about leaks in deciding to buy the Matrix. So, I find the applicant is entitled to damages for the oil leak.”

Spark Underwriters Chief Underwriting Officer David Willett told Repairer Driven News that shops should avoid using absolute statements and making open-ended and broad statements verbally as well as on websites and social media pages that imply perfect repairs.

“Sometimes people like to make it sound like they solve the world and they make everything beautiful on their website,” he said. “It increases your liability in that regard. …in general, in any of your marketing or anything that goes out to the public that could be used as a reason, even as statements you make when they come into your shop about what you guys do or you don’t do, any of those increases the duty of care that you are expected to deliver to your customer.”

Another option for shops, Willett added, is to include a conditional statement on all ads that makes it clear results can vary, and/or use qualifiers throughout the ad statements.

Updating websites and social media to reflect current services and certifications should also be important to shops, Willett said. For example, if a shop used to be I-CAR Gold certified and no longer is, then there’s an issue that calls that certification into question, he said that could be used very strongly against the shop.

“In most circumstances, our typical insured [advertises], ‘Every day we’re improving the life and the functionality of the car.’ All those types of things are fine as long as it doesn’t make it look like, ‘You bring it in and it’s going to be beautiful.'”

To avoid liability and being taken to court, collision repairers should also document every issue they see with every car and its general condition whether it pertains to what they’re repairing or not to avoid taking on liability for previous repairs they didn’t complete.

Opus IVS ADAS Solutions Vice President Frank Terlep has also many times driven home the importance of documentation noting that repairers should document their every move like they’re going to court the next day. Pre- and post-scans and the reports produced from both should also be kept for each repair.

“You need to document every repair as if you were going to court tomorrow,” Terlep said during a November Repairer Driven Education (RDE) session at this year’s SEMA Show. “Particularly when you’re talking about technology that controls steering, braking, and acceleration because if you don’t have the documentation that you did the right things the right way at the right time with the right people and you get dragged into court, you’re gonna lose, and if you’re not following OEM procedures.

“You should [take] as many images as you can to document what your people are doing [with] the vehicle. You need a report of what they did. We call this a workflow report, and this workflow report, time and date stamps everything a technician does during the calibration process.”


Featured image credit: andresr/iStock

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