Head gasket repair complications - liability?

Question:
We had the head gasket on our Toyota Tercel '98 repaired just before christmas. Within a couple of weeks of driving it the oil light came on and there was hardly any oil left in the tank - no external oil leak (oil leaks were never a problem prior to this repair). So we took it back to the garage and sure enough there's only 50% compression in one of the cylinders and it needs a new engine. The garage admitted that it's a 1 in 100 chance that this can happen with repairing the head-gasket and that this did happen as a result of the 'repair'. Who now has the liability for replacing the engine? So far the garage has said that they won't charge me any labour, but I'm still waiting to hear back from them re: the costs of the replacement engine. Shouldn't they be liable for all costs?

Answers:

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You need to find out exactly what is wrong with the engine. It sounds like either a blown head gasket or a cracked head. If you let the engine overheat, it could cause either. If it's just the blown head gasket, then you need to have the head milled because it's warped. when in doubt, I over torque the head about 5% when I install it and have never had a problem.
I think I would have the garage remove the head again since they're not charging for labor and get to the source of the problem. If they screwed up something, they pay but if it's a warped head, you buy the parts and they install them free.

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Get all your facts - what was done, when, the miles on the car, the bill you got from the mechanic, everything - and call the guys at cartalk - go to the website below. They can give you better information than most of the people here.

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Well for one the head should have been checked when it was taken off the car. You still may just have a bad head instead of needing a whole engine. You would be responsible for the engine if they are willing to do the labor for free that is cool though. I would ask if the head was checked when they pulled it though. You may have a warpped or cracked head common problem when you have to change the head gasket.

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You say that one of the holes is down 50% at this point, but was the hole any good to start with.
Depending on how many miles were accumulated in those two weeks, to loose all of your oil through that one cylinder, one would think that you looked like a mosquito fogger going down the road.
However you say the repair facility is admitting fault with the repair, 1 in 100 or not it sounds like they just bought an engine

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if its a factory defect then they should bill the factory for the labor and cost of a new engine.i never heard of repairing a head gasket and the compression would drop.if anything,you should have more compression.sounds to me like the compression rings are bad.
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