On 20 December 2024, the House of Lords’ Financial Services Regulation Committee published a letter it had sent to the FCA’s Chief Executive, Nikhil Rathi, responding to his previous letter regarding motor finance commission.
The letter notes that the Committee is considering the implications of the recent decision to grant leave to appeal to the Supreme Court in the cases of Hopcraft, Johnson, and Wrench. It also notes the FCA’s intention, now that the decision to appeal has been granted, to ask the Supreme Court to allow the FCA to share its expertise with the Court.
The letter adds that ordinarily, recent developments would require Parliament to engage its rules on sub judice which usually requires the House to abstain from discussing cases to be decided in the UK’s courts. However, given the importance of the issues raised by this litigation, the Lord Speaker has granted a waiver of the sub judice rule to enable the Committee to continue this correspondence notwithstanding the active proceedings in the case.
In the letter the Committee asks if it could understand / receive from Mr Rathi:
- The relevant FCA Rules and Principles concerning both discretionary and fixed commissions.
- Whether the FCA took legal advice both in connection with its decision to ban discretionary commission arrangements (which it did in 2021) and in connection with the Rules/Principles referred to in 1. above? If so, and in each case, when and from whom was that advice sought? And, if it was sought/given, please provide in full the evidence of that advice.