2 days ago
The eyes of the motor trade will today be on the Supreme Court as Close Brothers’ appeal against last year’s landmark finance ruling gets underway.
Both Close Brothers and FirstRand Bank are appealing last October’s bombshell Court of Appeal ruling which found in favour of consumers, who claimed they had been mis-sold car finance.
The decision found that dealers should have told customers about any commission received from lenders as part of finance deals, sparking chaos in the finance market.
The appeal is set to get underway today (Apr 1) with submissions to the court expected to last around three days.
Among those to give evidence will be the National Franchise Dealer Association and the Financial Conduct Authority, although the treasury will not be allowed to make submissions, despite a failed intervention from the chancellor.
No immediate decision is expected following the hearing, with the Supreme Court expected to publish its full ruling over the summer.
However, Reuters reports that the case’s ‘potential wider significance’ could push a decision even later into the year – leading to an ‘anxious wait’ for major lenders including Lloyds, Santander and Barclays.
Discussing the potential impact of the hearing, Richard Fletcher, business editor at The Times, said: ‘Supreme Court cases rarely trouble City investors or analysts.
‘But a three-day hearing kicks off today that could leave banks and other lenders on the hook for compensation that it has been estimated could reach £44bn.
‘Hundreds of millions have been wiped off the value of some of the UK’s biggest banks — including Close Brothers — since the City regulator began an investigation into the potential mis-selling of car loans last January.
‘It has been claimed that dealers did not properly disclose commissions and unfairly increased the interest rate on loans to earn more.
‘The growing dispute has revived memories of the PPI mis-selling scandal which fuelled a boom among ambulance-chasing claims-management firms and left lenders footing a redress bill of about £50bn.’
Pictured (via PA Images): A general view shot of the Supreme Court in London
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The post Close Brothers’ Supreme Court appeal gets underway as finance providers face ‘anxious wait’ appeared first on Car Dealer Magazine.
