If a mechanic replaced a part on a car, and it malfunctioned or wasn't the right part, are they liable to cover any damages caused by their faulty work? Details below.

Was it a licenced shop

Yes,if they were whom the dealer refered her to. So is the dealer. Lemon Law! The ? Is how much time has lapsed?

The dealer did refer her to the shop, and because it's an actual business I would assume that they are licensed.

All depends on how much time has gone between now and then.If she has documentation to support the two repairs etc.

You say it is old enough and has enough miles that the steel tubes rusted through. Then the dealer had you go to another shop besides them. That shop found the issue and used hose instead of steeline that ends in hose. Then you had issues with lower ranges in the trans. You think the fluid loss caused internal damage. But there is much paperwork to be weeded through. so many questions to answer. You can have the diagnosing entity call the dealer and find out how they can get it corrected, or get your papers ready for court. The people who were paid to correct it may have to be consulted in your state. You keep going where you get them to listen and take notes as to who you speak to and all that. Ask the sales person, his boss, up the line till you have your answer. if they cannot get it covered, or corrected, you need legal advice for the laws in your state. Bring your paper that says who bought what from whom for how much, and what was your coverage. You are appealing to the ones the paper suggests you goto.

Have your copy of the work performed. have the same of the new diagnosis the hoses failed, have the names and phone numbers as you go. They may want to speak to the diagnoser of the gear range loss. and the repairing shop. Then the cost and coverage is with the dealer, and the questioned repair shop.