The decision of the Court of Appeal on the cases of Johnson, Wrench and Hopcraft were published today and there was a resounding, unanimous decision in favour of all 3 claimants.
Today’s ruling on the test case, which involved customers issuing claims against Close Brothers Ltd and FirstRand Bank Ltd, said consumers needed to know all the material facts that could affect their borrowing decision including the total commission to car dealers, and how it was calculated, in order to be able to consent to the loan.
The Court of Appeal has protected financially unsophisticated consumers who look to buy a car from a motor dealer who has benefitted from a commission payment from the lender for arranging the finance.
In all 3 cases the Court of Appeal found the lender liable to the consumer for paying a commission to the broker without the consumer’s knowledge or informed consent.
Each case involved the purchase of a second-hand car for less than £10,000 through hire purchase agreements.
In one case no mention of commission was ever made and in the other two there were reference in documents that were buried in the small print.
The legal reason for the decision primarily hinges around the brokers duty to act in the best interests of the customer, which the Court of Appeal believed they had clearly not.
The FCA commented: ”We note the Court of Appeal judgment on 25 October 2024, in Johnson v Firstrand Bank Ltd, Wrench v Firstrand Bank Ltd and Hopcraft v Close Brothers Ltd, and are carefully considering its decision.”
So, a great day for ordinary people or “financially unsophisticated consumers” as the Court of Appeal would call them.
We welcome today’s decision by the Court of Appeal. This is great news for anyone who bought a car via a finance agreement arranged by the car dealer
If you think you may have been mis-sold car finance, just add a few details to our mis sold car finance claims checker for us to find your car finance agreements. We’ll then tell you if you can claim and how much you might receive.
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