Consumer Voice said it would challenge the scheme, arguing that the FCA had decided on too narrow an approach to calculating losses. It said that although 12.1 million agreements would be covered by the compensation scheme, some “4.7 million mis-sold agreements will not be included at all”.
It is working alongside lawyers at Courmacs, which is representing more than a million drivers currently seeking payouts via the courts, rather than through the FCA scheme.
Technically, the consumer group would apply to the Upper Tribunal, which is part of the judicial system and is designated to settle legal disputes. Paperwork is expected to be filed to the court on Friday.
The application will ask the tribunal to review the way the scheme has been designed, particularly how compensation was calculated.
Consumer Voice argued that there was no need to delay payouts.
“The [FCA compensation] scheme should still be able to get up and running, while the Tribunal looks urgently at the parts of the rules dealing with redress,” it said.
“The aim is to fix the flaws, not to stop compensation.”
There has been widespread speculation that others affected by the compensation scheme could challenge it, such as lenders. This would not immediately be made public, and the deadline for any legal challenges is on Monday.
Kevin Durkin, from HD Law, which represented Marcus Johnson, who won his case in the Supreme Court, said: “The current scheme simply does not have the general public’s needs at the forefront. While a judicial review may result in a short-term delay, we hope it can deliver a fairer, more equitable outcome for consumers overall.
“Let’s hope that any potential delay results in more money in the public’s pockets. Short-term pain for long-term gain.”
However, not all consumer groups believe a challenge is the best way forward.
“Dragging this through the courts again to try and increase [payouts] will only delay payouts for consumers at a time when many households would welcome the cash,” said James Daley, managing director of Fairer Finance.
“Of course, while the end result may be better for consumers, there’s no certainty of that.”