Help with legal action against motorsports part supplier
Help with legal action against motorsports part supplier
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Original Poster:

125 posts

257 months

Saturday 9th March 2019
quotequote all
Hi all,

I'm looking for some advice about a situation that has been ongoing since last summer. Rough timeline (apologies, its a long story):


Spring 2017: Bought a brand new front differential for my hill climb / sprint car from a reputable parts dealer. This dealer had collaborated with a (world renowned) manufacturer to create a version of the differential that the manufacturer makes for many cars, that would be suitable for my car. The differential is designed for sealed surface Motorsport and high power applications (though my car isn't that powerful compared to some) and comes with a lifetime warranty. Differential is fitted by a Motorsports specialist which is based in Yorkshire (I live in Bristol) and generally regarded to be the #1 specialist in racing versions of my car in the country - the same specialist previously rebuilt most of my car and I 100% trust them. At the time, said specialist expressed concerns about how tight the fitment of the differential was directly to the manufacturer, but was told by the manufacturer that this wasn't an issue and to proceed with fitting.

Late summer / autumn 2017 Do a couple of events, no issues

2018 season: Do around seven events. Throughout the season I was struggling with the handling of the car. Diagnostics by the local motorsport garage (very good reputation on this forum) point to issues with the front differential, but we couldn't be sure. Eventually at the beginning of July, the front differential fails - sticking badly on a regular basis, a clattering backlash noise when coming off the throttle and swarf in the diff oil. I call the dealer who supplied the diff who contacts the manufacturer - manufacturer advises us to return the differential to them for inspection under the warranty. The local garage did not want to strip down the gearbox, so the engine and gearbox are removed from the car (much easier to get the gearbox out this way) and the gearbox shipped off to the specialist who fitted the diff in Yorkshire. Specialist removes the differential and sends it to the manufacturer.

After several months delay, we finally get a 'new' differential back. Manufacturer refuses repeated requests for an explanation of the failure, but does tell us that they have re-manufactured the internals of the diff in a stronger material (i.e. implying there was a design fault with the original). However, this 'new' diff does not fit in the gearbox when it is returned to the specialist. The output shafts on both sides are larger than the holes. Manufacturer eventually tells us to send the entire gearbox to them. They confirm that the new components have been manufactured to the wrong tolerances and give me two options 1) grind down the input splines 2) Broach the diff gears to accept the standard shafts. Under advisement from my specialists I choose option 2 as option 1 would leave me with custom shafts, making quick fixes to the shafts impossible if there was an issue.

Eventually the entire gearbox is delivered back to my local Motorsports garage (who still have the car) and they refit the engine and gearbox. Immediately, it is apparent that there is a problem - the clattering backlash noise is still there and their is swarf in the oil again. Engine and gearbox come back out the car, gearbox goes back to the diff manufacturer who try to blame the specialist in Yorkshire for a missing shim in the box. At this point I'm starting discussions with the manufacturer about them paying for some of the labour costs, but they blame everyone else and try to hide behind a clause in their warranty that claims they are not liable for consequential losses. In the middle of this discussion, the gearbox arrives back (with the shim issue supposedly fixed as a 'goodwill gesture') and engine / gearbox go back in the car.

You can probably guess what happened next, the backlash clattering noise is still there and swarf in the oil again... this from one of the worlds foremost manufacturers of gearboxes and differentials for motorsport applications. Dealer (who has been the middle man with the manufacturer all along - they wouldn't speak to me directly) contacts the manufacturer, who tries to blame the other parties again, but advises me to return the gearbox to them again for diagnosis.

At this point I have lost confidence in the manufacturer and choose to send the entire car back to the specialist in Yorkshire (this week). The specialist has begun diagnostics and immediately finds the following:

"If you look closely XXXXX have ground the cross shaft to make it fit the front diff, so basically they have not addressed the clearance problem I sent the box with, in fact they have bodged it to make it fit, you can clearly see the grinding marks out of the end of the cross shaft splines

XXXXX have no way out of this because the std cross shaft still wont fit into the diff from the centre diff side, yet they have modified the end the driveshaft fits

Unfortunately they put the cross shaft in the wrong way round, which isn't the gear noise, but it means the gearbox has to be removed to strip the front diff out to sort the original fitment problem of clearance to the sun wheel / cross shaft splines

Lets get it all apart then put a full case together, you may need to employ an engineer to give a full written report if this all goes to court"

I rang the specialist this morning and he advised me that there is further evidence of bodgery - e.g. big globs of sealant everywhere. He has also disconnected the prop shaft and centre diff and is 99% certain that the backlash noise is coming directly from the front differential (i.e. the likelihood is this has failed and needs replacing again). The gearbox is basically ready to come out of the car, but he thought it might be a good idea to either video the removal or get an independent engineer to observe the removal and disassembly of the gearbox - in order to avoid any possibility of the manufacturer blaming him (as they have previously tried to do).

Costs wise, my rough estimates are as follows:

Initial diff fitting: £1000
Diff purchase: £2340
Investigative work: £500
First removal / replace of engine and gearbox: £1450
Specialist diff removal: £600
Second removal / replace of engine and gearbox: £1450
Shipping car to Yorkshire: £260
Third removal / replace of engine and gearbox: ?
Engineer: ?
Refit original (open) diff or second replacement lsd from manufacture: ?

The sum total is more than £7600 so far, with more costs to come.

There is also a worst case scenario where the failure of the diff has caused damage to the gearbox - this looks unlikely at the moment, but the gearbox would be valued at about £3500.

Finally, this completely ruined my season last year and the specialist in Yorkshire has offered to fit a standard road car box so I can at least get out competing this year. There would obviously be additional costs with this.

I would really appreciate any advice as to how to proceed and if an independent engineers report is recommended, who I could potentially use near North Yorkshire (this is urgent).

Following on from that, do I have a legal case against the manufacturer? My aim is to recover some of my costs and have a racing front differential that works - I don't think this is unreasonable! Pretty much everything is documented in emails.

Thank you in advance!


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Original Poster:

125 posts

257 months

Saturday 9th March 2019
quotequote all
Pictures I got yesterday for context:








A205GTI

750 posts

196 months

Saturday 9th March 2019
quotequote all
I personally would not go down the county court yet,

I would send a letter from a solicitor to them outlining the costs and lack of trust and goodwill as this will carry more wait than you sending a letter for 7 days small claims.

You would be surprised how many companies start a dialogue when this is done,

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Original Poster:

125 posts

257 months

Sunday 10th March 2019
quotequote all
That could be a good strategy.

The more immediate problem is how to build up a body of evidence in such a way that there is no dispute - hence my question about filming the dissassembly or having independent engineer observe.

If the engineer is the sensible option, how do I go about finding such a person?

Solicitor wise - should I be looking for anyone with any particular specialism?

rgf100

86 posts

135 months

Sunday 10th March 2019
quotequote all
There are directories of expert witnesses, I think that might be what you need. Eg, this guy, found in a few minutes, sounds like he might suit.

http://www.vehiclequality.co.uk/

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Original Poster:

125 posts

257 months

Sunday 10th March 2019
quotequote all
Thanks - that helps a lot.

Is the consensus that getting such a person in is a good idea? There is no doubt that the specialist who has the car is the foremost expert in these gearboxes in the country and is the person who can fix it - but he is obviously mixed up in the dispute.....

paintman

7,860 posts

220 months

Sunday 10th March 2019
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He's independent so has no vested interest in the outcome.

BertBert

21,267 posts

241 months

Sunday 10th March 2019
quotequote all
paintman said:
He's independent so has no vested interest in the outcome.
I don't think he is independent. If I read the story correctly he did work which had been questioned by the diff supplier.
Bert

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Original Poster:

125 posts

257 months

Sunday 10th March 2019
quotequote all
I think paintman meant that a consultant engineer would be independent.

anonymous-user

84 months

Sunday 10th March 2019
quotequote all
You do not need a specialist solicitor for this. Any good general litigator would do, but the amount at stake may make the cost/benefit ratio of instructing a lawyer unfavourable.

anonymous-user

84 months

Sunday 10th March 2019
quotequote all
Your claim falls within the small claims limit, but the need for a technical expert may persuade the court to allocate the claim to what is known as the multi track. In a small claim, legal costs are not usually recoverable, and expert fees are capped at a fairly low figure. In a multi track case, the winner will usually be awarded costs, and in practice this means that the loser has to pay about 75 to 80% of the winner's costs.

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Original Poster:

125 posts

257 months

Sunday 10th March 2019
quotequote all
To recap, the reasons I think the manufacturer should reimburse me for the labour costs I incurred:

- The first version of the diff failed and they replaced the internals with stronger materials - therefore there is an argument to say the original internals were not fit for purpose
- The second diff was manufactured to the wrong tolerances meaning it didn't fit
- The manufacturer promised to have the drive gears broached to achieve the correct fit, but only did one side - the cross shaft in my gearbox has been bodged with a hand grinder to make it fit (as well as being put in the wrong way round), which is absolutely not acceptable
- Despite having the whole gearbox twice - something is still broken. We suspect they didn't actually check the diff the second time at all, instead focusing on a missing shim, which was most likely missing due to the work they did the first time (although they deny this). A strip down (observed by an independent engineer) will find the exact fault, but it is very likely to be the diff
- I think I will end up with two options 1) get another new diff from the manufacturer 2) Get a refund and reinstate the original open diff

I want option 1) and I want it to work without issues as promised. Any new diff I would want to have the same lifetime warranty.



When I started talking to them about them paying for some of my costs (which given the circumstances I thought to be fair), I was directed to a page on their website, specifically the following section:

5.0 Warranties and Liability
5.1 Seller warrants that the Goods will at the time of delivery correspond to the description previously given by Seller.

5.1.1 In relation to Goods supplied for use in competition, trialling or other motorsports applications (“competition”), such use is acknowledged by every Buyer as being experimental in nature as such use may involve exceptional and unpredictable loadings. Buyer accepts that Buyer will be solely responsible for ensuring safe use of the Goods in the application intended by Buyer.

5.1.2 Except where Buyer is dealing as a consumer (as defined in the Unfair Contract Terms Act 1977 Section 12) all other warranties, conditions or terms relating to fitness for purpose, satisfactory quality or condition of the Goods and whether implied by statute or common law or otherwise are excluded.

5.1.3 If Buyer is a consumer Seller hereby excludes all liability to Buyer except in relation to death or personal injury caused or contributed to by the negligent act or omission of Seller.

5.2 Seller shall keep trade Buyers fully indemnified against any claim against them arising by reason of any injury, loss or damage (other than the trade Buyer’s or any third party trader’s indirect loss or loss of profits or other economic loss of whatever nature) to persons or property caused or contributed to by Seller’s negligence except to the extent that death damage or personal injury was caused or contributed to by the negligent act or omissions of such Buyer and or persons claiming through Buyer and or which occurs in competition.

5.3 In the absence of any fraudulent misrepresentation by Seller, Seller shall not be liable at all to Buyer for any indirect loss and/or expense (including loss of profit) suffered by Buyer arising from Seller’s breach of contract.

5.4 Save as provided under Clause 5.1.2 above Seller’s liability to Buyer or anyone claiming through Buyer shall not exceed the Price of the Goods.



However, I did not buy the diff directly from the manufacturer and this was the first time I had ever seen such conditions (plus I bought it the best part of two years ago, and who says they haven't changed their website T&C's since?).



However, I do have the warranty T&C's for the 'lifetime' warranty from when the diff was purchased:

XXXXXX XXXXXX Differential – Warranty and Limitation of Liability
Warranty
XXXXX ENGINEERING LTD (“XXXXX”) warrants each new XXXXX YYYYYYYYYYYYYYY (YYY) differential excluding specialised vehicles both purchased and used anywhere in the World outside the United States of America (including its territories and dependencies), Canada or Mexico, against defects in manufacture, material and workmanship, when used in the vehicle application for which it was originally designed and specified, under any and all operating conditions, including racing, for as long as the original purchaser owns the differential.
XXXXX will replace or repair, free of charge, at its sole discretion, for each qualifying original purchaser, any defective YYY differential both purchased and used anywhere in the World outside the United States of America (including its territories and dependencies), Canada or Mexico, which is returned to XXXXX and which is not excluded from the warranty benefits of this warranty.
Important: Exclusion from Warranty Coverage: This warranty does not extend to any YYY differential, or part thereof, which has been either purchased in or imported into, and or used in any one or more of The United States of America (including its territories and dependencies), Canada or Mexico.
To qualify for this warranty the original purchaser must complete the “warranty registration form” via our website
homepage.
Important: The Warranty will be voided or inapplicable to any YYY differential:
(1) which is not bought new and un-used directly either from XXXXX or a distributor or dealer authorised by XXXXX to
distribute the YYY differential in the territory of purchase; or
(2) which is degraded, damaged or deteriorates due to fair wear and tear within parameters of high performance use; or
(3) which is damaged or broken due to careless or inappropriate installation or removal ; or
(4) which is installed or used in any vehicle or manner for which it is not specified by XXXXX; or
(5) which is modified altered reconfigured or disassembled in any manner by any person other than XXXXX after it has
been manufactured by XXXXX.
(6) which has had its XXXXX-stamped part number tampered with or removed.
Warranty Claims Procedure:
If making a claim for replacement or repair, you the original purchaser must send the YYY differential you purchased, together with a copy of the warranty registration form, and original proof of purchase in your name, to XXXXX at:
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX by traceable delivery (Recorded Delivery/Courier). XXXXX will contact you when the YYY differential has been received.
XXXXX need not honour the warranty if all the requisite evidence of original purchase is not supplied by you.
If you have a valid warranty claim XXXXX will bear the cost of sending back to you the replacement or repaired YYY differential, solely to the address at which the warranty is registered.
If you are not the original purchaser of the YYY differential, you should contact XXXXX, at XXXXXXXXXXX, for information concerning after sales repairs.
Limitation of Liability
Save in the event of death or personal injury caused to any person a national or resident of a member state of the European Union by any negligent act or omission of XXXXX, XXXXX excludes to the fullest extent permitted by law any liability to the purchaser of an YYY Differential or any person claiming through that purchaser and XXXXX accepts no obligation to bear any labour costs or other costs of return, removal and/or installation and will not be liable for any special, incidental, or consequential damages, including loss of use of any vehicle. Each Purchaser acknowledges that motor racing is a dangerous sport and that he or she is responsible for taking and will take all necessary safety measures to minimise the risk of injury loss or damage arising from the use to which an YYY Differential is subjected.
PLEASE KEEP THIS FOR YOUR RECORDS.
The Warranty is in addition to, and the limitations and exclusions in this Warranty do not limit, the minimum statutory rights of consumer purchasers in the European Union, where those may exceed the limitations in any particular instance.
This warranty and limitation of liability is governed by English Law.
The terms of this warranty extend to all YYY Differentials sold with this warranty form. XXXXX reserves the right to vary or alter the terms.



I have tried to do everything the right way, used people who are experts in their field, been extremely polite and patient with the manufacturer despite everything discussed above. From a fairness perspective I don't think anyone would argue that the manufacturer should rectify the situation with the part and make a significant contribution to the labour costs. However, if I was to take them to the small claims court for example, how would I outline this from a legal perspective?


JohnnyRevPants

17 posts

240 months

Sunday 10th March 2019
quotequote all
The first question to ask is, what would a judge do, if you went to court and pleaded your case.

The Consumer Rights Bill 2015 (replaced the Sales of Goods Act 1998) is the law which covers you when purchasing items. Any claim that you make against the supplier will only return you to where you were, before they sold you broken/faulty items, plus interest. So be careful of spending/employing professional third parties.
£7,600 is a lot of money and within the small claims court limit (see here: [url=]https://www.gov.uk/make-court-claim-for-money/court-fees[/url])

If you have tried several times to get your problem resolved, and can evidence that, then I believe that you are in a position to claim what you paid them back. BUT, you can only claim back what they owe you. In other words you can't take your car to the other end of the Country to get someone else to fix it, and claim the hotel bill to stay overnight (I'm sure you wouldn't - just giving an example).

Although you can take it through the small claims court, my suggestion would be to go to Citizens Advice first. Then get a solicitor to draft a letter setting everything out and how much you want them to pay you. Solicitor letter £150-£200. Small claims fee was £410 online fee. £600 to get your money back.

Hope this helps.


anonymous-user

84 months

Sunday 10th March 2019
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Your claim is against the seller that you dealt with, unless you have made a separate warranty agreement with the manufacturer.

agtlaw

7,404 posts

236 months

Sunday 10th March 2019
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Breadvan72 said:
You do not need a specialist solicitor for this. Any good general litigator would do, but the amount at stake may make the cost/benefit ratio of instructing a lawyer unfavourable.
I agree. However, it may be worth instructing a solicitor to draft the claim.

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Original Poster:

125 posts

257 months

Sunday 10th March 2019
quotequote all
Breadvan72 said:
Your claim is against the seller that you dealt with, unless you have made a separate warranty agreement with the manufacturer.
The warranty was advertised by the seller (and still is) as the following text in the item description: "Lifetime warranty." (that's it).

I had to register for the warranty on the manufacturers website.


hutchst

3,727 posts

126 months

Monday 11th March 2019
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Looking back at your original post, it looks as if you paid the seller £2,340 for the diff? If that's the case I'm struggling to see how you could expect to recover any more than that from the seller in a small claims action.

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Original Poster:

125 posts

257 months

Monday 11th March 2019
quotequote all
hutchst said:
Looking back at your original post, it looks as if you paid the seller £2,340 for the diff? If that's the case I'm struggling to see how you could expect to recover any more than that from the seller in a small claims action.
If it had just been a case of the original failure occurring, getting a replacement diff with reassurances that it wouldn’t happen again, refit and all is well - I would agree with you. However as my story details, my losses have been significant (and are ongoing) as a direct result of actions of the manufacturer. They are much higher than would be reasonable to expect in such a situation.

This is why I came here for advice......








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Original Poster:

125 posts

257 months

Monday 11th March 2019
quotequote all
Forgot to say: whilst a refund for the diff is an option I have to keep on the table, given that no-one else makes a front lsd for my car, that’s a last resort.

QBee

22,483 posts

174 months

Monday 11th March 2019
quotequote all
Just a general comment for the two learned gentlemen who have kindly commented:

I have never understood why claims for faulty car parts seem to be limited to the cost of the part.
In many if not most cases the broken part has to be removed from the car and the new one fitted by a trained expert.
Is he expected to do this for free?

I am an accountant and act for a specialist who mainly works on one brand of sports car.
He is a one man business and his biggest complaint is the number of occasions where he is put in this situation, having to spend a number of hours FOC replacing faulty new parts.
Does he have the right to claim his lost earnings from the supplier of the faulty part?
Do they, who are usually merely middlemen holding stocks of parts, have similar rights against the manufacturers?