Supreme Court to rule on car finance cases on Friday – at 4.35pm

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Supreme Court: Late sitting

The Supreme Court is to take the highly unusual step of issuing its heavily anticipated ruling in the car finance cases at 4.35pm this Friday.

This is presumably to avoid any immediate influence on the shares of affected lenders – including Lloyds, Santander, Barclays and Close Brothers – although the Supreme Court stressed that “no inference should be drawn from the timing of the hand-down as to the outcome of the appeals”.

The Supreme Court usually delivers its decisions at 9.45am.

Millions of potential claims worth up to £40bn or more rest on the outcome of the ruling, and law firms and claims management companies have been advertising aggressively in recent months to recruit clients.

In three conjoined cases last year, the Court of Appeal found it unlawful for car dealers, acting as credit brokers, to receive a commission from the lender without obtaining the customer’s informed consent.

In one, the dealer failed to disclose the commission they received from the lender, Close Brothers, and in the other two partially disclosed it in the small print of the credit agreement. The lender in both of those cases was FirstRand Bank.

The customers were all successful in the Court of Appeal either on the basis of the tort of bribery or on the basis of dishonest assistance. One of the claimants was also successful in his claim that it was an “unfair” relationship under the Consumer Credit Act 1974.

According to The Guardian last week, in the event the Supreme Court upholds the decision, Chancellor Rachel Reeves is considering whether to introduce legislation with retrospective effect to curb its impact – both on car finance claims and other areas where there have been secret commissions.

Jamie Patton, managing director at claimant firm Johnson Law Group, responded: “This is not leadership; it is a direct challenge to judicial independence. If a private individual were found to have taken thousands of pounds unlawfully, they would be held fully accountable.

“Yet when large financial institutions engage in systemic misconduct, the political response appears to prioritise shielding those institutions from liability rather than protecting the public.”

He argued that retrospective legislation would set a dangerous precedent: “that when judicial outcomes threaten powerful interests, Parliament may rewrite the rules to help these interests avoid liability”.

In February, the Supreme Court rejected the Treasury’s bid to intervene in the appeal; the application said it was worried that the Court of Appeal’s judgment could have a significant and potentially damaging impact on the motor finance market.