The Supreme Court is preparing to deliver a verdict in July on the conjoined appeals of Hopcraft & Another v Close Brothers, Johnson v FirstRand Bank t/a MotoNovo Finance, and Wrench v FirstRand.
The Legal Journey – April to July
1–3 April 2025: The Supreme Court heard the appeals against the Court of Appeal’s October 2024 ruling, which held that dealers and lenders must fully disclose commission deals and obtain informed consent.
July 2025: The judgment is anticipated imminently. Legal observers note that the ruling may reshape commission law beyond motor finance, affecting credit-broker models across sectors.
Why This Matters
Consumer Redress Scheme
The FCA has pledged to decide within six weeks of the ruling whether to adopt an industry-wide redress scheme (§404 FSMA), likely via an automatic opt-out model. This would allow consumers to receive compensation without lodging individual complaints.
Systemic Financial Impact
The cost of redress could reach up to £44 billion, similar in scale to the PPI scandal. More than 23 million UK adults anticipate eligibility for compensation.
Claims Management Pitfalls
The FCA warns that engaging claims firms may result in losing up to 36% in fees and VAT, while internal exit charges of £175 per hour have been flagged for withdrawn claims.
The Core Legal Issues
Secret vs disclosed commissions: Did dealers act honestly and provide adequate notice of commissions?
Fiduciary duties: Must dealers act in the customer’s best interests when brokering finance?
Consumer Credit Act and unfair relationships: Can non-disclosure render agreements unfair under s.140A CCA?
FCA & Industry Preparation
Complaint pause to December 2025: The FCA has deferred responses and extended referral deadlines to harmonise any eventual redress scheme.
Redress principles: Any scheme will emphasise fairness, consistency, transparency, and firm-led assessment with FCA oversight.
Industry readiness: Lenders and brokers are advised to audit past commission practices, trace affected customers, and prepare infrastructure for 2026 implementation.
Advice for Consumers
Hold fire: Await the Supreme Court ruling before taking action.
Gather documentation: Locate finance agreements from 2007 to January 2021; these may contain undisclosed commission clauses.
| Timeline | Expectation |
|---|---|
| July–August 2025 | Supreme Court publishes its judgment. |
| Within 6 weeks | FCA confirms whether a redress scheme will proceed, and outlines structure. |
| Late 2025 – Early 2026 | Scheme launches; firms start payout processes. |
| 2026 onward | Consumers begin receiving compensation; regulatory reforms take effect. |
