UK Supreme Court hands down significant judgement on motor finance commission complaints

The UK Supreme Court has handed down its judgment on the conjoined appeals involving two lenders who challenged the decision of the Court of Appeal that a car finance broker could not lawfully receive a lender's commission without first obtaining the customer's fully informed consent to the deal. In its judgment, the Supreme Court largely overturns this decision, deciding that lenders who financed the car loans were not liable to their customers for bribery for failing to obtain their informed consent to commission payments made by the lenders to the dealers arranging the finance. However, in relation to one customer liability did arise on the basis there was an unfair relationship between the customer and lender for the purposes of the Consumer Credit Act 1974. For further detail on the judgment, you may like to read our article "Commission not impossible: no bribery or breach of fiduciary duty in failure to disclose car finance commission". On the same day, the UK Financial Conduct Authority (FCA) issued a statement in response to the Supreme Court's judgment. The FCA acknowledged the significance of the ruling and confirmed it would provide further clarity regarding a potential redress scheme, which it then published on 3 August.

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