Supreme Court: Government trying to shield motor finance industry
The government’s bid to intervene in the Supreme Court hearing on the motor finance appeals breaches the constitutional separation of powers, solicitors for two of the claimants have argued.
The lawyers from Manchester firm Consumer Rights Solicitors (CRS) said the intervention “seems to suggest that the Supreme Court should consider extrajudicial factors” – the wider economic impact of upholding the Court of Appeal – in reaching its decision
Writing today on Legal Futures, Esmaeil Momeni, litigation team lead solicitor, and solicitor Ovye Affi said: “Applying to join a case and make submissions as an intervener does not in itself amount to usurpation of the power of the judiciary by the government.
“However, where the government is sounding alarm bells and informing the court of an impending economic Armageddon and the court should rule in a particular manner, then the government seems to be attempting to wield some unwanted influence on the court.”
“Furthermore, the ethical implications of the government’s ‘intervention’ appears questionable. Is it morally justifiable for the government to urge the UKSC to prioritise the interests of the car finance market and the economy over the interests of individual citizens in private proceedings between financial institutions and individual members of the public?”
In three conjoined cases, 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. The Supreme Court is to hear the appeal on 1 April.
In January, HM Treasury (HMT) announced that it has applied to intervene on the basis that the ruling could have a significant and potentially damaging impact on the market.
The CRS solicitors said: “The government intervention is an effort to shield the motor finance industry. A principal point of concern is that HMT’s intervention seems to suggest that the Supreme Court should consider extrajudicial factors in reaching its decision.”
They said that, while the involvement of the executive arm of government as an intervener in the appeal may not, at face value, be at odds with the constitutional doctrine of separation of powers, using the proceedings as a “tool in a political strategy” was a breach.
“When lending companies unfairly profited from individual customers who are members of the public, they created an imbalance in the micro-economy.
“Enforcing the rights of the individual customers by deciding that those companies should make reparation to the individual customers would neither lead to large-scale negative impacts on the economy nor cause stagnation in the economy.
“Rather, a redistribution of wealth will occur. The redistributed wealth would be channelled into other sections of the economy, which could, in fact, stimulate growth.”
It was, they concluded, “unfair and immoral for the government, on the basis of economic stability, to attempt to influence the judiciary to seek excessively lenient consequences for lending companies that treated individual customers unfairly”.
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