July 21, 2024
News

Appeal Court hears groundbreaking case on motor finance commission

A significant case involving three motor finance commission disputes is set to be heard at the Court of Appeal this week in the UK.

The claims, brought by three individuals, will be presented before Lady Justice Andrews, Lord Justice Birss, and Lord Justice Edis.

The court has consolidated the cases: Hopcraft v. Close Brothers, Wrench v. Firstrand Bank, and Johnson v. Firstrand Bank and Motonovo Finance.

These cases do not involve the Financial Ombudsman Service, as the appellants have chosen to pursue court proceedings independently. The disputes originate from various regional courts in England. The case against Close Brothers was dismissed by Kingston-upon-Hull Combined Court last year, while the other two are appealing County Court decisions.

All three cases were granted permission to appeal in March. The court will examine the duty, if any, owed when a commission is paid to a dealership that arranges a finance agreement for its customer with a finance company. It will also consider the application of laws regarding secret and half-disclosed commissions to motor finance commission payments.

Close Brothers and Firstrand Bank will be defending the claims. Close Brothers’ defence is led by barrister Ian Wilson KC from 3VB, instructed by Russell Kelsall, a partner at Walker Morris.

In May, the Financial Ombudsman Service acknowledged that judicial reviews and decisions by the Court of Appeal could influence its approach to similar complaints.

The case will run until Thursday and can be viewed remotely on the Judiciary’s YouTube account.

At the beginning of the year, the Financial Conduct Authority (FCA) initiated a review of historical motor finance commission arrangements, discretionary commission arrangements (DCAs), and sales practices across several firms. The FCA is expected to outline its next steps in the review this September, providing further insight into potential compensation costs.

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FAQs

Q: What are the key points of the motor finance commission disputes in this case?

A: The disputes involve three individuals challenging commission payments in motor finance agreements.

Q: Who are the parties involved in the court proceedings?

A: The appellants, Close Brothers, Firstrand Bank, and Motonovo Finance are the key parties defending their positions.

Q: What implications could this case have on the motor finance industry?

A: The outcome of this case could impact how commission payments are regulated and disclosed in the motor finance sector.

Conclusion

The outcome of the landmark motor finance commission disputes at the Court of Appeal will have significant implications for the industry. The court’s examination of duty and commission payments could lead to changes in how such transactions are regulated and disclosed in the future.

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