Today marks a significant milestone for the motor finance sector as the Supreme Court has handed down its much-anticipated judgment in the Hopcraft case.
In a landmark decision, the Supreme Court has found that fiduciary duties are not to be found where the intermediary has an independent commercial interest. Whilst this decision will come as a huge relief to the motor dealer and auto finance industries, the Supreme Court has found there was an unfair relationship in one of the cases based on an assessment of the facts of that case. This is likely to mean that lenders still face the possibility of historic liabilities. The FCA is expected to provide clarity on the scope of those liabilities in short order. However, the judgment does provide renewed certainty around the ongoing ability to provide finance to customers which will clearly will be welcomed.
Obviously there are nuances in the decision that will need to be considered and we are working through the implications for our clients both within and beyond the motor finance sector.
But today’s judgment is likely to mark a significant narrowing of the circumstances in which consumers are entitled to redress and should mark the beginning of the end in the long-running saga around commissions in the motor finance industry.
We will issue an online client briefing note on Monday.