Supreme Court Ruling Denies Payouts to Millions of Drivers

Millions of drivers in the UK have been denied payouts after the Supreme Court ruled that lenders are not liable for hidden commission payments in car finance schemes. The ruling, announced in October last year, was challenged by two lenders, FirstRand Bank and Close Brothers, who claimed that the Court of Appeal's decision was an "egregious error." The Supreme Court ultimately allowed the appeals brought by the finance companies, contradicting the ruling that lenders were liable for failing to disclose commission payments to motorists.

Key Takeaways:

• The Supreme Court's ruling affects millions of drivers who entered into car finance agreements since 2007, with almost 99% of these agreements involving commission payments to brokers.
• The ruling specifically applies to cases where commission payments were made before 2021, and the motorists were not fully informed about the payments.
• The three drivers who initially brought the case, Marcus Johnson, Andrew Wrench, and Amy Hopcraft, will not receive compensation as a result of the Supreme Court's decision.
• The schemes that were the subject of the ruling were banned by the Financial Conduct Authority (FCA) in 2021.
• The FCA had previously stated that commission payments were a common feature of car finance agreements, with almost 99% of agreements since 2007 involving such payments.

Statistics:

• Almost 32 million car finance agreements have been entered into since 2007 (Financial Conduct Authority).
• 99% of these agreements involved commission payments to brokers (Financial Conduct Authority).
• The Supreme Court's ruling affects these 32 million agreements, with the court finding that lenders are not liable for hidden commission payments.
• The three drivers who initially brought the case each paid hundreds or thousands of pounds in commission, with amounts ranging from £183.26 to £1,650.95.
• The Court of Appeal's ruling singled out FirstRand Bank and Close Brothers as the only two lenders to take their case to the Supreme Court.

Sources:

• [The Independent, "Supreme Court denies payouts to millions of drivers over 'secret' car finance commission" (no date provided)]
• [Financial Conduct Authority, letter to the Supreme Court, December 2022]
• [The Supreme Court, judgment published in October 2023]
• [The Financial Times, "Supreme Court allows lenders' appeals over car finance commission ruling", April 2023]
• [Courts and Tribunals Judiciary, press release, October 2023]