This decision sent shockwaves through the car industry because it meant almost all car finance deals from 2007 could be affected, leaving the customer eligible for compensation. Experts originally estimated that as much as £40billion could be up for grabs in redress payments.
However, in early August 2025, the UK’s highest court, the Supreme Court, overturned the Court of Appeal’s judgement, claiming that dealers do not have a fiduciary duty to act in their customer’s interest, rather than their own.
Lord Reed, the President of the Supreme Court, delivered the judgement, saying: “At no point did the dealer give any kind of express undertaking or assurance to the customer that in finding a suitable credit deal it was putting aside its own commercial interest as seller.”
However, as part of the same case that covered the undisclosed commission, the Supreme Court upheld a ruling surrounding what was deemed an “excessive” amount of commission. In this instance, commission paid to a dealer accounted for as much as 55 per cent of a car finance loan – something that has now been ordered to be paid back to the customer.
Following this, the FCA said it would consult on an official redress (compensation) scheme. This consultation has since ended and this brings us up to now, with the FCA having submitted the final redress scheme proposal. That is, unless the Upper Tribunal deems the current plans unfair or unlawful – something it’ll decide on in Spring 2027.
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