UK Supreme Court opens three-day hearing on motor finance commission complaints

The three-day hearing of the significant Supreme Court case involving motor finance commission complaints has begun. The case involves the conjoined appeals involving two lenders who are challenging 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 full informed consent to the deal. This has the potential to impact other sectors that use intermediaries remunerated by commission, extending its implications beyond the motor finance industry. The UK Financial Conduct Authority (FCA) has previously confirmed that if, taking into account the Supreme Court's decision, it concludes that customers have lost out from widespread failings by car finance providers, it is likely the FCA will consult on an industry-wide redress scheme. This would mean that the usual complaint process would not apply to those consumers in scope of the scheme, and the onus would be on providers to review whether or not customers had lost out and, if so, offer compensation in accordance with rules set by the FCA. The FCA has also published written submissions to the Supreme Court including a statement that the Court of Appeal went too far in effectively treating motor dealer brokers as generally owing fiduciary duties to consumers.

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