Jurisdiction(s):
United Kingdom

UK Supreme Court: motor finance commissions not bribes; dealers owe no fiduciary duty; s140A unfairness is fact-specific, with Johnson succeeding; remedies typically limited to commission plus interest

Published on: 01 August 2025

Published by a LexisNexis Restructuring & Insolvency expert

Legal News

Article summary

Hopcraft and another v Close Brothers Limited; Johnson v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance; Wrench v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance [2025] UKSC 33

Background

These three conjoined appeals addressed payments of commission by finance lenders to motor dealers for arranging hire purchase finance on cars, where that remuneration was not revealed, or only partly revealed, to the car hirers. In the usual scenario, a buyer attends a dealership, selects a vehicle, and agrees a price with the dealer. The dealer then secures a finance offer from a lender on hire purchase terms. Acting on the lender’s behalf, the dealer puts that offer to the customer. In every appeal, the dealer made profit on the vehicle sale and, significantly, also obtained a commission from the lender for introducing the business. Either the fact of commission was not disclosed to the customer at all, or there was only limited disclosure suggesting that a commission, of unspecified amount, might be paid. Each of the customers commenced proceedings against the lenders. In such arrangements, the dealer functioned as the lender’s intermediary in presenting the finance, whilst earning undisclosed remuneration from that introduction to the lender directly thereby...

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