The Supreme Court (the Highest UK Court) has issued a decision on some of the claims where it is alleged that car finance was mis-sold. The claims were mainly based on the fact that those who purchased cars from dealers were not advised of the amount of commission they were paying to arrange it. The car dealers were simply taking the opportunity to sell an additional service to the car purchaser (the buyer did not have to take it as they could have arranged finance and insurance elsewhere).

The claims were potentially going to amount to billions of pounds and would have been very damaging to major insurance companies. I welcome the Supreme Court decision and I actually said this in a previous blog post: “It is surely daft that customers who bought insurance with their eyes wide open should be able to claim anything. They presumably were happy with the costs and level of cover, so the fact there were undisclosed commissions is irrelevant”.

One commentator on that blog post suggested that the car dealer was acting as an agent for the car owner so had a fiduciary duty to advise the owner of the terms of the deal and the commission being paid. But the Supreme Court said no fiduciary duty was owed which hopefully kills off most of the dubious legal claims.

Unfortunately the Court decision is not quite as clear cut as it might appear and there might still be room for some claimants to pursue their cases. Claims management companies were actively pursuing the recruitment of millions of claimants and some appear to be still doing so.

It is surely time for the Financial Conduct Authority (FCA) to kill off any suggestions of a “redress scheme” in this case and to clarify the legal position going forward – by new legislation if necessary.

In general the Courts should not be inventing new legal principles or protecting the ignorant against their own mistakes retrospectively.

Roger Lawson (Twitter: https://x.com/Drivers_London )

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