June 22, 2024
News

VRA Advises Optimism Regarding Discretionary Commission Arrangements

There are three key reasons for optimism over the issue of discretionary commission arrangements (DCAs), delegates to a meeting of the Vehicle Remarketing Association (VRA) were told recently.

Jonathan Kirk KC of Gough Square Chambers, mentioned that around three-quarters of claims being brought in county courts were being won by lenders and dealers; secondly, at least one decision published by the Financial Ombudsman is now the subject of proceedings for judicial review with a good chance of being reversed; and finally, there was considerable scope for potentially knock-out defences under the Limitation Act 1980.

However, dealers and lenders need to be aware that this issue is not disappearing and should be taken seriously. While there are strong grounds for hope, the matter cannot be ignored.

It is also believed that the indemnity that invariably exists between lender and dealer for liabilities has not received the attention it deserves so far, and this is something that is likely to become more important over time.

Held at the Milton Keynes Dons football ground, the event was organized by the VRA in conjunction with its legal counsel, Jonathan Butler of Geldards LLP and hosted by Suzuki GB. The keynote presentation on DCAs featured Jonathan Kirk KC, Jonathan Goulding and Daniel Brayley of Gough Square Chambers.

Jonathan Kirk is ranked as the star individual silk for consumer law by Chambers and Partners and a Band One KC by the Legal 500, while Jonathan Goulding is similarly also ranked as a leading junior.

Jonathan Butler, partner at Geldards, stated, “Particularly since Martin Lewis’ TV program in February, the subject of DCAs has been a concern for many parts of motor retail, and this event provided both expert guidance and a valuable open platform for discussion.”

Other presentations featured Louis Maxwell, senior insight manager at AutoTrader, on current dynamics affecting the used car sector, while Dale Wyatt, Ed Norman and Ian Banks of Suzuki GB looked at the brand’s product plans including the new Swift, and its general remarketing strategy.

Philip Nothard, chair at the VRA, mentioned, “DCAs are clearly a subject that continues to be a key issue for the used car sector and we intend to offer expert, ongoing commentary to our members and the wider industry as the matter progresses.”

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FAQ

Here are some frequently asked questions about discretionary commission arrangements:

  • What are the key reasons for optimism regarding DCAs?
  • Why is the indemnity between lender and dealer important?
  • Who presented at the VRA event on DCAs?

Conclusion

DCAs continue to be a significant issue in the used car sector, with ongoing legal reviews and challenges. It is crucial for dealers and lenders to stay informed and take this matter seriously to navigate potential legal implications.

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