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How Top Court Ruling Limits Scope of Motor Finance Claims
Reprinted from: Law360 | 08/19/2025Cadwalader partners Tom Grodecki, Suzanne Bell, Robert Cannon, Sabah Nawaz and Bevis Metcalfe recently authored an article in Law360, “How Top Court Ruling Limits Scope Of Motor Finance Claims.”
In the article, the authors analyze the UK Supreme Court’s August 1 judgment in the motor finance commission test cases of Johnson v. FirstRand Bank Ltd., Wrench v. FirstRand Bank Ltd. and Hopcraft v. Close Brothers Ltd.
The Court rejected the Court of Appeal’s finding that dealer brokers owed fiduciary or disinterested duties to customers, consequentially removing lender liability for dishonestly assisting breaches of such duties or for “bribery” in relation to undisclosed commissions.
However, the Court upheld a finding of “unfairness” under Section 140A of the Consumer Credit Act in Johnson, a fact-specific determination requiring detailed assessment of individual borrower-lender relationships.
The authors note that the ruling significantly narrows the scope for mass litigation over dealer broker commissions and limits incentives for claims management companies to pursue such cases, while also prompting the Financial Conduct Authority to consult on a proposed industrywide redress scheme, expected by early October 2025.
Read the full story here (subscription required).
