A court ruling which could leave motorists being owed compensation over car finance commission payments “goes too far”, the UK’s financial watchdog the Financial Conduct Authority (FCA) has told the Supreme Court.
In written submissions for the hearing in London, Jemima Stratford KC, for the FCA, said: “The sweeping approach of the Court of Appeal in, effectively, treating motor dealer brokers as owing fiduciary duties to consumers in the generality of cases, goes too far.”
“The FCA submits that motor dealer brokers do not typically owe fiduciary duties. Treating all motor dealer brokers as fiduciaries would be too sweeping an approach.”
The Supreme Cout is looking at the Johnson v FirstRand Bank Limited, Wrench v FirstRand Bank Limited and Hopcraft v Close Brothers cases.
The Financial Conduct Authority (FCA) and the National Franchised Dealers Association (NFDA) are listed as interveners in the case. It was revealed in February that the NFDA would be able to intervene.
Since these claims and many others have been brought by consumers, the FCA have been providing both lenders and consumers with guidance on handling complaints.
The Supreme Court will provide further clarification with regards to the extent of the duty owed by dealers to consumers when selling motor finance.
The appeal will allow the Court to consider detailed legal arguments and could potentially row back from more contentious aspects of the Court of Appeal decision.
The upcoming Supreme Court ruling could trigger an FCA redress scheme for motor finance.
However, the FCA will not confirm any developments regarding redress until at least six weeks after the ruling.
