Latest update: June 2026
The FCA has confirmed a motor finance redress scheme. However, the scheme now faces a legal challenge, so payouts may be delayed.
The Supreme Court ruling still matters because it helped shape the FCA’s approach. It also explains why some claims may depend on the facts of each agreement.
What the car finance Supreme Court ruling meant for drivers
The Supreme Court gave its car finance ruling on 1st August 2025. The decision narrowed some legal arguments, but it did not end the wider issue of unfair motor finance commission. Some drivers lost one route to redress, while others still had strong grounds to challenge unfair agreements. The FCA later confirmed a separate redress scheme, which is why the ruling still matters today.
What Was the Car Finance Case About?
The case centred on three linked appeals: Hopcraft v Close Brothers, Wrench v FirstRand Bank (MotoNovo), and Johnson v FirstRand Bank (MotoNovo). The Supreme Court gave judgment on 1st August 2025.
Each case considered whether undisclosed commission made the finance relationship unfair. The core issue was whether lenders and dealers had given customers enough information about commission and their wider commercial arrangements.
The list below sets out the basis of each claim.
1. Hopcraft v Close Brothers Ltd
Amy Hopcraft said she entered a hire-purchase agreement in 2014 without being told that the dealer would receive commission from Close Brothers. She argued that the undisclosed commission breached duties owed to her.
2. Wrench v FirstRand Bank Ltd (MotoNovo)
Andrew Wrench entered two hire-purchase agreements in 2015 and 2017. He argued that undisclosed dealer commission influenced the finance offered to him and made the arrangement unfair.
3. Johnson v FirstRand Bank Ltd (MotoNovo)
Marcus Johnson argued that the dealer received a very large commission from FirstRand without his knowledge. He also argued that the relationship was unfair under section 140A of the Consumer Credit Act 1974. The Supreme Court ultimately held that Mr Johnson succeeded on that section 140A unfair-relationship claim.
What Did the Car Finance Supreme Court Ruling Say?
The Supreme Court reached different outcomes across the three linked cases. It rejected the wider tort and fiduciary arguments that had expanded lender liability in the Court of Appeal. However, it still found that Mr Johnson succeeded under section 140A of the Consumer Credit Act 1974 because the relationship was unfair.
1. Hopcraft v Close Brothers Ltd
The Supreme Court allowed Close Brothers’ appeal. It rejected the claim based on fiduciary duty and bribery, so Ms Hopcraft did not succeed against the lender on those grounds.
2. Wrench v FirstRand Bank Ltd (MotoNovo)
The Supreme Court also allowed FirstRand’s appeal in Mr Wrench’s case. It held that the dealer was not acting under the kind of fiduciary duty needed to support the bribery and equity claims.
3. Johnson v FirstRand Bank Ltd (MotoNovo)
Mr Johnson did not succeed on the wider tort and equity claims. However, he did succeed under section 140A of the Consumer Credit Act 1974, because the Supreme Court found that the relationship was unfair.
What the ruling meant overall
The decision narrowed some legal routes for car finance claims, but it did not shut the door completely. It removed the broader lender exposure created by the Court of Appeal, while still leaving room for unfair relationship claims in the right case.
Supreme Court ruling summary table
| Case | Dealer commission paid? | Fiduciary duty owed? | Bribery claim valid? | Unfair relationship under CCA? | Outcome |
| Hopcraft | Yes, undisclosed | No | No | No | Claim rejected |
| Wrench | Yes, undisclosed | No | No | No | Claim rejected |
| Johnson | Yes, large undisclosed | No | No | Yes – due to scale & concealment | Claim upheld – redress owed |
Broader implications of the ruling
The Supreme Court ruling changed the legal landscape for motor finance claims. It narrowed the broader lender liability created by the Court of Appeal and made it harder to bring the widest secret commission arguments. Even so, the judgment did not close every route to redress. Mr Johnson still succeeded under section 140A, which showed that an unfair relationship claim could still succeed in the right facts. That left the wider issue of motor finance compensation unresolved and helped set the stage for the FCA’s later redress scheme.
When can commission make a car finance relationship unfair?
Not every commission payment makes a finance agreement unfair. The key issue is whether the customer was given enough information before signing.
A relationship may be unfair if commission was hidden, if the amount was unusually large, or if the lender and dealer failed to explain how the finance worked. The Supreme Court made clear that unfair relationship claims still depend on the facts of each case.
That is why disclosure matters. If the customer did not understand how commission affected the deal, the agreement may still be open to challenge.
What does the car finance Supreme Court ruling mean now?
The Supreme Court ruling still matters because it shaped what happened next. It narrowed some legal claim routes, but it did not end the wider motor finance issue.
After the judgment, the FCA moved ahead with its redress scheme. That gave many drivers a clearer route to compensation, even though the legal position changed in the Supreme Court.
So, the ruling remains important today. It explains why some legal arguments fell away, why unfair relationship claims still mattered, and why the FCA stepped in afterwards.
Are Lenders Off the Hook?
No. The Supreme Court ruling reduced the wider lender exposure created by the Court of Appeal, but it did not remove lender liability altogether.
The court rejected the broadest fiduciary and bribery-based arguments. However, it still held that an unfair relationship claim could succeed under section 140A of the Consumer Credit Act 1974.
That mattered because it left room for redress in the right cases. It also helped shape the FCA’s later decision to introduce a motor finance compensation scheme.
What does this mean for DCA claims?
The Supreme Court ruling did not end the wider issue of discretionary commission arrangements. DCAs remained a major focus for the FCA, even after the judgment changed some legal claim routes.
That is why the FCA later moved ahead with a separate redress scheme for unfair motor finance commission. So, while the ruling changed the legal position, it did not remove the possibility of compensation for drivers affected by DCA-style arrangements.
How Much Could Affected Drivers Claim?
The amount depends on the facts of each agreement. The Supreme Court ruling did not set a fixed payout level, but it did confirm that some unfair relationship claims could still succeed.
Since then, the FCA has moved ahead with a wider redress scheme. The FCA says average payouts could be around £830 per agreement, although the final amount will depend on each case. Read our car finance compensation update for more details.
So, the ruling still matters. However, the amount of compensation now depends more on the FCA scheme and the facts of each case than on the judgment alone.
Who could still be affected after the car finance Supreme Court ruling?
Drivers could still be affected after the car finance Supreme Court ruling if they used finance for a car, motorbike or van between 6th April 2007 and 1st November 2024.
Many lenders were affected, including Black Horse, MotoNovo, Barclays Partner Finance, Santander Consumer Finance, and Close Brothers.
This was not limited to one or two firms. It affected the wider motor finance market.
Did the Supreme Court ruling stop car finance claims?
No. The Supreme Court ruling narrowed some legal routes, but it did not stop every car finance claim. The FCA later confirmed a redress scheme for affected motor finance agreements.
What Should Drivers Do Now?
If you think your agreement involved hidden or poorly explained commission, now is a good time to check the details.
The Supreme Court ruling changed the legal position, but it did not end the wider motor finance issue.
The FCA later moved ahead with a separate redress scheme. However, that scheme now faces a legal challenge, so the final timetable is uncertain.
If you want to check whether your agreement may be affected, use our short survey to find your agreements. It only takes a few minutes to discover your lenders.
