8:58 am, July 30, 2025
The government is considering how it can best protect lenders ahead of this week’s Supreme Court ruling on the motor finance industry.
Car Dealer has reported extensively on the ongoing car finance crisis, with both Close Brothers and FirstRand Bank appealing last October’s bombshell Court of Appeal ruling which found in favour of consumers, who claimed they had been mis-sold car finance.
The decision found that dealers should have told customers about any commission received from lenders as part of finance deals, sparking chaos in the finance market.
Submissions were made over several days in April and a final ruling is now expected to be made public on Friday (Aug 1) afternoon, when the court breaks for its summer recess.
The Treasury previously attempted to step in and make submissions to the hearing but the request from chancellor Rachel Reeves was ultimately denied by the court.
However, that hasn’t stopped the government from working to protect lenders, should the court find against Close Brothers and FirstRand.
The Guardian reports that the Treasury could overrule any verdict against finance providers by superseding the supreme court’s decision with the Ministry of Justice and Department for Business and Trade.
Measures said to be under discussion include a retrospective change to the law which would hand parliament the final word over the handling and disclosure of commission arrangements to borrowers.
It is hoped that the move would keep any redress scheme manageable for lenders and ensure that the scandal does not move beyond the automotive world.
The Guardian says that the measures are being considered after ‘months of lobbying by the Financing & Leasing Association (FLA) and Lloyds Banking Group’.
In response to the rumours, a Treasury spokesperson said: ‘We don’t comment on speculation.
‘We want to see a balanced judgment that delivers compensation proportionate to losses that consumers have suffered and allows the motor finance sector to continue supporting millions of motorists to own vehicles.
‘It is now appropriate to let the appeals process run its course.’
The Treasury has previously expressed concerns that the case has ‘the potential to cause considerable economic harm and could impact the availability and cost of motor finance for consumers’.
It has also said that a ruling against lenders could ‘generate a perception that regulation in the UK is uncertain’.
In the case of the appeal being unsuccessful, Reeves is said to have asked that ‘any remedy should be proportionate to the loss actually suffered by the consumer and avoid conferring a windfall’.
