Supreme Court Denies Mass Car Finance Compensation

The UK Supreme Court has ruled that car finance companies are not generally liable for undisclosed commissions paid to dealers in car finance agreements made before 2021, denying compensation to up to 23 million affected drivers. The Court overturned the earlier Court of Appeal decision but made an exception for Marcus Johnson, who received compensation due to an especially large, undisclosed commission in his case. While most claims, once expected to rival the PPI mis-selling scandal, will not proceed, a limited compensation scheme for loans with 'discretionary commission arrangements' may still be considered. The Treasury and regulators are reviewing the implications for both finance firms and consumers. Reforms to the Financial Ombudsman Service and the Consumer Credit Act are underway to ensure greater industry fairness and transparency. The ruling has been welcomed by finance companies but has left consumer groups and millions of drivers disappointed.