Verdict could could pave way for millions of motorists to claim compensation for mis-selling
The UK’s highest court is poised to give its verdict on the £44bn car finance scandal, which could pave the way for millions of motorists to claim billions of pounds in compensation for mis-selling.
The supreme court judgment, which will be handed down after financial markets close at 4.35pm on Friday, will decide whether or not to uphold a finding by the court of appeal in October that hidden commissions paid to car dealers by lenders were unlawful.
That ruling, based on test cases, said making such payments to brokers who arrange car loans without disclosing the sum and terms to borrowers was unlawful. The lenders involved in the case – FirstRand Bank and Close Brothers – appealed against that decision to the supreme court.
The vast majority of new cars, about 90%, as well as many secondhand cars are bought using finance agreements. If the UK’s most senior judges uphold the earlier decision in its entirety then those customers could be entitled to billions in compensation, leading to huge liabilities for lenders.
