Legal expert Professor Henry Blair of MILS has looked at an up and coming Supreme Court ruling that could trigger an FCA redress scheme for motor finance and the impact it could have on dealers
The Supreme Court hears the Johnson, Wrench, and Hopcraft appeals on 1–3 April 2025. Professor Blair said a redress scheme may not happen but if it does it has implications for dealers with mounting pressure.
“Of course, it’s possible a redress scheme will not be created. The FCA has postponed any final announcement on redress until at least six weeks after the Supreme Court’s ruling—so keep an eye on late spring 2025 for clarity,” said Professor Blair.
But if it was introduced it would change the entire playing field, he said.
“Rather than customers individually pursuing complaints or claims through courts—which can be inconsistent, costly, and protracted—a redress scheme would likely place the onus on motor finance firms and dealers to proactively identify affected consumers and provide compensation according to FCA-prescribed rules.
“While this structured approach would dramatically simplify the process for consumers, potentially eliminating reliance on claims management companies and courts, ensuring that consumers retain the full compensation awarded, it could also increase administrative burdens on firms and accelerate when liabilities will be felt by the industry.”
And dealers could be impacted.
“While motor finance providers will likely shoulder most of the load under a redress scheme, dealerships are not immune.
“Given their central role in commission disclosures and finance arrangements, dealerships could face significant pressure, particularly if finance providers attempt to recover losses or seek indemnities.
“We are therefore urging all our dealership clients to rigorously audit not only their ongoing finance practices, but their historical practices in order to be best prepared for what could be a turbulent summer and autumn.”
The full version of this is in the March issue of Motor Trader