Ten forecasts around Friday’s Supreme Court Motor Finance Commission judgement

This article was originally published on LinkedIn on 30 July 2025

As many posts here on LinkedIn may have already mentioned, the Supreme Court judgement on car finance commissions is due on Friday. But will Friday's judgement really end uncertainty over historical motor finance commissions, or will it turn out to be just one more step on the path to the issue being resolved? 

Given that over the past two years I have been suggesting what should happen in the whole commissions debacle this is intended to pull the various points together, to give a picture of what I believe a sensible outcome might be.

So here’s what I think might - or should - unravel, starting on Friday but likely to take many more months:

1. Supreme Court will confirm that there should be more transparency around commissions: This is more of an assumption than a forecast, but could it really be the case that the lower courts just got this basic premise completely wrong? Perhaps the judgement will be more nuanced, but it still seems likely that it will still lead to a need for some redress. 

2. Supreme Court will confirm that it's the ‘quantum’ of commission that should be disclosed: To be useful, the commission disclosure needs to be provided when a firm first starts to engage with a customer. That way, the customer can decide if they want to shop around. At that stage, the exact amount is often unknown, so instead it will need to be a more general description, e.g. a range of different percentages. 

3. For regulated financial services, the FCA will propose fair and reasonable redress: Firms will need to put the customer back in the position they would have been in had the ‘right’ disclosures been made, so covering any possible loss or damage caused (e.g. see the FCA Handbook chapter on redress schemes CONRED 1.1.1). In this context, the loss or damage would be that the customer might have missed the opportunity to shop around for a better deal. So the redress would logically cover the difference between the rate charged and a typical competitive rate that the customer is likely to have found (see footnote for how to calculate this).

4. FCA redress will include discretionary commissions:  It would be confusing for the public if there were two two separate redress programmes, one dealing with what is found to be 'inadequate' commission disclosures, and another dealing with the use of discretionary commission models. A common redress programme is therefore likely to apply to both situations, based on the 'loss or damage' principle described in the point above.

5. Redress will not follow the FOS model: As above, I expect the FCA’s redress for both types of claims (inadequate disclosures, use of discretionary commission models) will be based on the ‘loss or damage’ principle. It won't therefore follow the approach taken by FOS, involving some notion of 'refund' of commissions that is likely to far exceed the actual loss or damage. So the Barclays Judicial Review, now expected to be heard in September, might turn out to be less significant than it previously looked.

6. Redress will often be zero or small (if firms have good data): If the test is whether the customer could have found a better deal elsewhere, often the answer will be no. It certainly has not been perfect, but motor finance has always been a competitive market.

7. The Government will not intervene with regulated financial services redress: The detailed FCA regulatory system is already in place to create fair and reasonable redress arrangements. It would be very odd for the Government to override this, unless the requirements arising from the Supreme Court are fundamentally out of line with FCA handbook rules, which seems unlikely.

8. The Government could intervene outside of regulated services: If the implications of the Supreme Court judgement extend beyond existing FCA regulated services, whether that’s into unregulated finance or completely different sectors, and especially if the effects are retrospective, then some changes to law might be very reasonable to avoid disrupting markets. 

9. Government will announce a review of how cars are sold: To ensure this doesn’t run and run beyond any FCA redress arrangements, I expect the Government will announce a review of the car distribution market, including but not limited to finance solutions because finance is so linked to the sale of the car. This could take the form of a market review by the Competition and Markets Authority. It would be a lot of work for firms, but would help to provide the certainty needed for the future.

10. Dealers will choose to cooperate with brokers: Unless the judgement doesn't make this whole problem go away, dealer groups will need to check for any other areas of regulatory risk. For example, are they doing enough to help any customers who prefer to source their own finance from outside of the dealership? I understand one national dealer group has changed its policy on this recently, expect

others to follow.