We are running this emergency Zoom event to coincide with the Supreme Court’s ruling on the mis-selling of hidden car finance commissions, expected at 4:35 PM on Friday 1st August.

The judgement hand down will be livestreamed, and the link will be visible here just before 4:35pm.

This case has been described as one of the most significant consumer finance rulings in UK history, potentially unlocking further redress for consumers and taking the total redress to between £35-£44 billion in compensation for millions of drivers mis-sold car finance through undisclosed and unlawful commission arrangements. These proceedings and this upcoming ruling by the Supreme Court follows a Court of Appeal judgment in October 2024, which found these arrangements unfair and unlawful. 

New developments raise major public concern: according to reports, Chancellor Rachel Reeves is considering intervening after the ruling, potentially limiting or overriding its consumer compensation impact. This has sparked outrage among campaigners and legal experts, who argue such a move would betray victims, undermine judicial independence and make the Government complicit in covering up one of the largest unlawful financial practices in decades.

Evidence suggests that the car finance industry, its trade bodies and the FCA have concealed multiple unlawful, and in at least one case, criminal, practices from both consumers and the courts. Campaigners claim that key consumer voices and investigators have been excluded from decision-making, while banks and lenders enjoy privileged access to senior ministers and Treasury officials.

However, we will also be exploring if the Supreme Court decision could expose the practices involved in the selling of other financial products and services, including insurance for example, as also unlawful which could lead to significantly further redress for consumers.

This event will provide live reaction to the Supreme Court’s decision and a discussion on what this means for affected consumers, what redress might look like and the steps you should or should not take next.

Nobody can predict what the Supreme Court’s decision will be, but:

If the decision is in favour of consumers:

The verdict will be a watershed moment for consumer rights in the UK. By upholding the Court of Appeal’s October 2024 ruling, the highest court in the land will have sent an unequivocal message: the era of hidden commissions and secret deals in car finance is over. 

There will be calls for a comprehensive inquiry into the catastrophic regulatory failures involving the Financial Conduct Authority and the Financial Ombudsman Service that allowed the scandal to persist for so long . 

People will want to know how did these institutions fail to protect consumers despite having rock solid evidence of widespread malpractice that was given to them by Paul Carlier, as far back as 2016, and as explained in:

• This BBC File on Four Investigates programme
• “The Car Finance Scandal; the Complete Exposé” events; Part 1 and Part 2  

The public deserves justice, accountability and answers, and those answers are only going to be arrived at through a proper inquiry. Industry experts estimate that the FCA’s inaction has allowed this scandal to mushroom, affecting millions more consumers and creating a compensation liability that could have been a fraction of what it will now be.

The lax response to the evidence given to the FCA and FOS by Paul Carlier shows the regulators failed to protect consumers as they should have done; and in the process has brought about a compensation bill so large that the very existence of some of the firms involved is now in question.

The FCA’s disastrous handling of the situation will have created a lousy lose/lose; for the consumers they are supposed to protect; and the industry they are supposed to regulate. 

Can the UK afford such a problematic, unreliable and ineffectual regulator that seems to stumble from one reputation-shredding crisis to another?

One can’t help wondering if the FCA will ever shrug off the characterisation that it is ‘incompetent at best, dishonest at worst’?

The car finance scandal isn’t just a potential existential threat to car finance companies; it might take out a regulator too.

If the decision is in favour of the banks and car finance companies:

It will have been a fascinating process, as the Court of Appeal and the Supreme Court will have made different decisions on the same underlying facts, something that could have been avoided had the rights of consumers and responsibilities of lenders been clearer.

There would therefore be an urgent need for legislation, principally the creation of a civilly actionable Fiduciary Duty owed to consumers by authorised persons. Introducing such a right would help rebuild much-needed consumer trust in a tarnished financial sector, a crucial step as the Government looks to the industry to contribute meaningfully to growth. It would also bring the UK into line with a larger and more successful financial market, namely the United States.

If the decision is in favour of the banks and car finance companies:

It will have been a fascinating process, as the Court of Appeal and the Supreme Court will have made different decisions on the same underlying facts, something that could have been avoided had the rights of consumers and responsibilities of lenders been clearer.

There would therefore be an urgent need for legislation, principally the creation of a civilly actionable Fiduciary Duty owed to consumers by authorised persons. Introducing such a right would help rebuild much-needed consumer trust in a tarnished financial sector, a crucial step as the Government looks to the industry to contribute meaningfully to growth. It would also bring the UK into line with a larger and more successful financial market, namely the United States.

And what if the Chancellor acts as reported she might?

Perhaps the most disturbing scenario would be if the Supreme Court decides in favour of consumers but then the Chancellor seeks to overrule the decision, potentially limiting or overriding its consumer compensation impact, as suggested by reports.

Some claim such a move would betray victims, undermine judicial independence and make the Government complicit in covering up one of the largest unlawful financial practices in decades. If the Chancellor does intervene in this way, it will surely be a dark day for democracy. The narrative will be about ‘corporatism writ large,’ and that the Chancellor is at risk of being labelled ‘the Manchurian candidate of the City.’

There’s going to be lots to think about and discuss, whatever happens.