The Supreme Court’s hearings on the motor finance commission scandal have entered their second day, revealing the depth and complexity of the issues at hand. As an observer within the courtroom, the intensity of the debates underscores the significant implications for both consumers and the financial sector.
Day One: Appellants Challenge Fiduciary Duty
On the inaugural day, legal representatives for Close Brothers and FirstRand Bank (MotoNovo) presented their case, arguing against the Court of Appeal’s prior decision. They asserted that imposing a fiduciary duty on car dealerships to disclose commissions was an overextension of legal obligations. Their primary concern was that such a mandate could disrupt established commercial relationships and introduce uncertainty within the motor finance industry. This sentiment was echoed by the Financial Conduct Authority (FCA), which, while not directly supporting the appellants, voiced apprehensions about the broader economic consequences of the ruling (The Guardian, 1 April 2025).
Day Two: Focus on Consumer Rights and Transparency
The second day shifted focus towards the arguments presented by solicitors representing consumers. They emphasised the paramount importance of transparency in financial transactions, particularly highlighting the potential conflicts of interest arising from undisclosed commissions. Drawing parallels with previous financial mis-selling scandals, they contended that consumers have an unequivocal right to be informed about any financial incentives that might influence their agreements. The justices engaged actively, posing probing questions about the practical implications of enforcing such disclosures and the potential ripple effects across the financial sector (Law360, 2 April 2025).
Potential Financial Implications
Discussions also delved into the potential financial ramifications for the motor finance industry. Estimates suggest that compensation liabilities could escalate to as much as £44 billion, underscoring the gravity of the court’s impending decision and its capacity to reshape
industry practices (The Guardian, 1 April 2025).
Awaiting a Landmark Decision
As the hearings progress, the courtroom remains a focal point for the broader debate between consumer rights and commercial interests. The justices’ incisive inquiries reflect their cognisance of the delicate balance they must achieve. All stakeholders keenly await a judgment that promises to have far-reaching consequences for both consumers and the financial sector.
References:
 The Guardian, 1 April 2025 – Banks face anxious wait as UK Supreme Court considers ‘secret’ motor finance commissions
 Law360, 2 April 2025 – Consumers tell UK justices car dealers owe transparency
 Reuters, 1 April 2025 – Is Britain on the cusp of another multibillion-pound consumer finance scandal?
