Jurisdiction(s):
United Kingdom

Motor finance commissions: UK Supreme Court to rule on dealers’ fiduciary duties and lenders’ ‘bribery’ liability; FCA intervenes with market-wide claims at stake

Published on: 02 April 2025

Published by a Law360 reporter

Legal News

Article summary

Two lenders challenge Court of Appeal ruling on fiduciary duty

FirstRand Bank and Close Brothers are contesting a Court of Appeal judgment holding that motor dealers owed customers a fiduciary duty and required consent before accepting lender commissions for arranging finance. Mark Howard KC of Brick Court Chambers, for FirstRand, argued the appellate court committed an “egregious error” in its October 2024 conclusion that dealers, acting as credit brokers, had to disclose commission arrangements. In filings, Howard described the outcome as a “novel finding” that “came as a very considerable surprise to the industry”.

The decision, which favoured three motorists — Marcus Johnson, Andrew Wrench and Amy Hopcraft — sparked suggestions that motor finance providers could face a flood of claims over historic agreements. Lenders might be required to reimburse consumers where such payments are deemed “secret”.

Howard says Britain’s highest court is broadly being asked to resolve two questions. The first is whether car dealers owed fiduciary duties to their customers...

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