Defendants lodge Supreme Court appeal in motor finance commissions case ahead of deadline

The defendants in the motor finance commissions case have lodged an appeal with the Supreme Court, the Consumer Credit Trade Association (CCTA) has said. The appeal was lodged ahead of the 22 November deadline¹.

The appeal follows a Court of Appeal decision on 25 October. The CCTA said aspects of that decision took the industry by surprise, and that the fallout led to some lenders temporarily pausing further lending¹. The court ruled that it expected the defendants not only to disclose commission amounts and the calculation of the arrangement, but also to obtain the customer's informed consent¹.

The CCTA said that up to that point there had never been any legal or regulatory requirements to obtain a customer's informed consent, and that the decision therefore applies to commission arrangements in general, including fixed or flat rate commission, not only discretionary commission arrangements¹. It said this was a surprise given that even the Financial Conduct Authority (FCA) was not concerned about other types of commissions, and that the FCA's current review into commission arrangements only covered discretionary commissions¹.

The CCTA said it believes an appeal was important because the Court of Appeal decision has wider implications for the motor finance market and brings all types of commission arrangements into scope, with potential for wider impact into other sectors too. It said it is working with legal professionals to support the appeal application¹.

Why it matters for households

The Court of Appeal decision concerns how commission on car finance was disclosed and consented to. The CCTA says the ruling covers commission arrangements in general, including fixed or flat rate commission, and not only discretionary arrangements¹. That widens the set of agreements potentially affected beyond those already under review by the FCA, whose review the CCTA says covered only discretionary commissions¹.

The CCTA also reports that the fallout from the decision led to some lenders temporarily pausing further lending¹. For households, that affects the availability of new finance, not just existing agreements.

The CCTA says firms are addressing their fiduciary duty, commission disclosures and informed consent in varying ways, with no set or preferred approaches, and that it is pushing the FCA to issue support and guidance to ensure alignment¹. It has not been reported what the FCA's guidance will say or when it will come.

What happens next

The Supreme Court is not required to take on any appeal and could decide not to, according to the CCTA¹. If it does take the matter on, the CCTA says no decision or ruling will come soon: it understands that even a fast track hearing could easily take between twelve and fifteen months¹.

The CCTA also notes a response from the Financial Ombudsman Service on its views for proceeding with proposals to charge claims management companies, and a further consultation on buy-now, pay-later products¹. The CCTA said the matter of commissions in the motor finance sector will continue to dominate well into 2025¹. Details of the motor finance redress scheme have not been reported in these sources.