In light of the Supreme Court’s ruling on motor finance commissions, Consumer Intelligence calls for a pragmatic and orderly process to be established by the Financial Conduct Authority (FCA) (please see the attached press release).
Ian Hughes, CEO of Consumer Intelligence, said: ““The Court got it right—they’ve targeted the exceptional cases without punishing standard business practices. This provides the clarity the industry needed whilst ensuring accountability where it’s genuinely warranted.”
“The industry must meet this challenge constructively. This is an opportunity to demonstrate an unwavering commitment to fairness.
“It’s vital we don’t confuse widespread historic practice with deliberate wrongdoing. The vast majority of firms operated fairly, even if disclosure clarity fell short. Targeted, structured redress will ensure fairness without punishing responsible firms . It’s important to remember the industry had already moved away from discretionary arrangements following FCA rule changes in 2021. This ruling effectively tidies up the legacy.
“The FCA’s enhanced Consumer Duty already guides better transparency and outcomes in the market. By working in close partnership with the FCA on a pragmatic redress framework, the industry can correct past wrongs caused by a few bad actors, draw a final line under this issue, and ultimately strengthen consumer trust.
“It is crucial to remember that this is a consequence of legacy practices from a minority of market participants. We urge the FCA to work closely with the industry to design a redress framework that is manageable, efficient, and minimises undue market disruption.”
COURMACS
Darren Smith, Managing Director at Courmacs Legal, has released this statement regarding the judgement:
“The Court has ruled on the position in relation to certain types of commission arrangements. It has not ruled on the position where a discretionary element was applied to the commission. It is even more important now that lenders make clear to customers the nature of their agreements, and if they were discretionary.
This still leaves many victims who will be entitled to redress but the story does not end here. The next chapter will be in September when the Court of Appeal will be hearing a case relating to the way the Financial Services Ombudsman has dealt with discretionary commission arrangements.
The FCA have themselves identified this case as being relevant to the actions they may take so we call on the Government, the Regulators, the Lenders and their associations to allow the judicial process to be completed and to respect the rule of law before seeking to interfere in any way with the redress that these victims may be owed.”
BIRKETTS LLP
Emma Bysouth, Legal Director in the Corporate Team and automotive sector lead at Birketts LLP:
“On 1 August 2025, the UK Supreme Court delivered its judgment in a landmark case concerning commission arrangements in motor finance. The Court ruled that car dealers do not owe a fiduciary duty to customers when arranging finance, overturning a previous decision that had deemed certain ‘secret’ commission arrangements unlawful. While this outcome favoured lenders and motor retailers, the Court acknowledged that some agreements may still be considered unfair under the Consumer Credit Act, leaving open the possibility of redress for affected consumers.
In response, the Financial Conduct Authority (FCA) has announced its intention to consult on a redress scheme focused on historic Discretionary Commission Arrangements (DCAs). This signals a renewed regulatory emphasis on consumer outcomes. While the legal clarity is welcome, both lenders and motor retailers will need to engage constructively in the consultation process to help shape a fair and proportionate framework. It will be interesting to see how the FCA addresses this during its consultation as it tries to balance delivering operational certainty for firms across the value chain while ensuring appropriate redress for affected consumers.”
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