Tom Espiner
BBC business reporter
BBC
Marcus Johnson says he is upset for the hundreds of people who won’t be able to make a claim
A ruling by the UK’s most senior judges has closed down an opportunity for millions of motorists to claim compensation for motor finance mis-selling.
The Supreme Court decided not to uphold an earlier ruling which found that hidden commission payments to car dealers were unlawful.
However, the ruling left open the possibility of claims for compensation for large commissions that were unfair.
The Financial Conduct Authority (FCA) says it will study the court’s judgement and decide whether a compensation scheme is needed before 08:00 BST on Monday.
The regulator’s chief executive Nikhil Rathi told the BBC any compensation scheme would be up and running by next year if it went ahead.
The BBC talked to two of the people who brought the case to the Supreme Court, plus a person who is planning to make a claim.
‘A really big bag of salt’
Marcus Johnson from Cwmbran, Torfaen, was one of the claimants in the landmark case.
He described the the outcome as “a bitter pill to swallow”, although was awarded just over £1,650 on the grounds his relationship with the lender was unfair.
Marcus said he was “pleased for myself, but not for the hundreds of others” who will now miss out.
“It’s weird,” he said. “It’s a win, but it’s a really big bag of salt to go with it.”
He was 27 when he bought a blue Suzuki Swift in 2017, and did not know the commission had been paid, although the lender said he had signed a document.
Soon after passing his driving test in June of that year he walked into a car dealership, and within an hour was driving away in a car he liked, “very excited”.
It wasn’t until three years later, when he had paid off the finance on the car, that he realised he still had almost the cash price of the car left to pay.
It was then he decided to contact lawyers.
Had the three claimants won their test cases, it could have opened up lenders to compensation claims totalling about £30bn.
As it stands, that bill could shrink to between £5bn and £13bn, according to accountancy and advice firm BDO.
‘There’s still meat on the bone’
Andrew Wrench
Andrew Wrench says he wanted to show that people should be accountable and honest
Andrew Wrench has been described as “a postman with a penchant for fast cars”.
He says that description “made me chuckle”. The 61-year-old is ex-forces, and also held other positions before becoming a postman, but he is proud to have been described as “the Erin Brockovich of Stoke-on-Trent”.
He says he is pleased Marcus was awarded compensation, and that there will be further claims arising from that judgement.
“There’s still meat on the bone,” he says, adding he is glad he helped throw light on the subject, even though his own case was not successful.
“I just want people to be accountable, and I don’t want them getting away with being deceitful and dishonest,” he adds. “It all comes down to: honesty is the best policy.”
Andrew’s lawyer, Kavon Hussain of Consumer Rights Solicitors, says the judgement was “a mixed bag”, but showed the Supreme Court expected car dealers to “always be acting in their own interests” and people should not expect a good deal.
‘I’m going to chase my claim’
Jemma Caffrey
Jemma Caffrey says she is “sad” for people who won’t now be able to make claim, but that she intends to pursue her case
Although it has been a mixed result for the claimants in the case, some people are determined to pursue compensation.
Some dealers were paid a bigger commission if they sold a higher interest rate on the loan.
These were known as discretionary commission arrangements (DCAs) and were banned by regulators in 2021.
Jemma Caffrey, from Blackburn, bought a car in 2009 after maternity leave. Her son was born with certain medical needs, and she wanted a car to get to work and multiple doctor appointments.
“I’m going to pursue my claim, but I do feel for the people it’s put a stop to,” she says. “They won’t be compensated and I find that quite sad.”
Jemma feels she was “taken advantage of as a vulnerable new mum”. She trusted the car dealership to give her the best deal it could, and paid a high interest rate for her blue Corsa, which she named “Colin”.
It was not until years later, having read about car finance in the local press, that she went to a law firm to bring a claim.
She now intends to pursue it.