In August, the Supreme Court handed down a unanimous judgment in three conjoined motor finance appeals – Hopcraft v Close Brothers Limited, Wrench v FirstRand Bank Limited and Johnson v FirstRand Bank Limited [2025] UKSC 33.

Each case covered various scenarios arising from the intermediation of finance during the sale of a car by a dealer, where the dealer was paid a commission by the lender. In Hopcraft, the fact the dealer would be paid commission was never mentioned. In Wrench, the mention of commission was “buried in the small print” in the lender’s standard terms. In Johnson, the commission was “partially disclosed”: it was mentioned in documents provided to the customer, but these did not explain how the commission was calculated, its amount, or the fact the dealer was contractually bound to favour a certain lender. The question for the Court was whether the payments gave rise to liability on the part of the lender (i) for dishonest assistance in the dealer’s breach of fiduciary duty, (ii) the tort of bribery, and (iii) to the consumer in the amount of the commission payment on the grounds that the relationship between them was “unfair” under the Consumer Credit Act 1974 (the “CCA”).

These cases were notable because the Court of Appeal’s judgment had opened the floodgates for consumers to bring claims against lenders following a failure to disclose any type of commission arrangement, rather than just discretionary commission arrangements (“DCAs“), which were banned by the FCA in 2021. The central issue in the appeal was whether the motor dealers owed fiduciary duties to the customers who sought to obtain a car. In finding that they did, the Court of Appeal had also raised the possibility of a deluge of similar claims in analogous transactions involving intermediaries such as mortgages and insurance. The decision therefore had serious implications for the financial services industry.

In an eagerly awaited judgment, the Supreme Court overturned significant findings of the Court of Appeal, holding that:

• In each case, the dealers did not owe fiduciary duties to the customers, such a duty being one of “undivided loyalty” which must be expressly or impliedly undertaken. The lenders could therefore not be held liable as accessories for breach of fiduciary duty, as no such duty existed.
• Further, a claim in bribery depends upon the recipient of that bribe owing a fiduciary duty and not some lower form of duty. A duty to provide information, advice or recommendation on an impartial or disinterested basis (the so-called “disinterested” duty) is insufficient. It follows that the lenders could not be held liable in the tort of bribery.
• However, in Johnson, the claimant succeeded in their claim under section 140A of the CCA.  The Court found that these claims are fact sensitive and the relationship between lender and consumer was “unfair” for the purposes of ss.140A-B of the CCA.  This was, in particular, because of the size of the commission relative to the charge of credit; the failure to disclose the commission; and the concealment of the commercial tie between the lender and dealer (the lender having a right of first refusal over the dealer’s business).

This is a clear, robust and unequivocal decision by the Supreme Court. In finding that the car dealers are not fiduciaries (with the liabilities for dealers and lenders which potentially follow), the Court have restored a measure of common sense to the position and provided certainty as to the rights of customers and the obligations of both car dealers and motor finance lenders.

However, Mr Johnson’s successful claim under the CCA did give rise to the possibility of similar claims involving commission arrangements which were not DCAs. The facts in Johnson were quite unusual; the size of the commission (being 55% of the total charge for credit) in particular points towards an imbalance between lender and customer.  But where to draw the line?  And if, as the Court suggests, the lack of disclosure is a further factor in the balancing act under section 140A, how much weight should that be given?

On 7 October 2025, the FCA published a consultation on an industry-wide redress scheme to compensate customers who were treated unfairly between 2007 and 2024. The consultation covers how regulated firms should assess whether a relationship between the motor finance lender and customer was unfair for the purposes of the redress scheme and if so, the compensation that should be paid. To help ensure consistent outcomes for consumers, the FCA are consulting on extending the deadline for firms to send a final response to certain motor finance complaints to 31 July 2026.