Motor finance commission litigation: Strategic guidance for lenders and brokers

The Supreme Court’s Ruling is here – are you prepared?

On 1 August 2025, the UK Supreme Court delivered a pivotal judgment on commissions in motor finance. At the heart of the decision: the scope of broker duties, commission disclosure obligations, and the potential scale of consumer redress.

For lenders, intermediaries, and automotive finance providers, the implications are significant – and immediate.

 

Key Risks and Emerging Challenges

While the Supreme Court decision confirms that brokers do not owe fiduciary duties, the industry is still facing:

• Redress exposure which is estimated by the FCA to be between GBP9billion to GBP18billion
• Findings of unfair relationships under the Consumer Credit Act
• Thousands of paused FOS complaints and pending county court claims
• FCA consultation on redress for Discretionary Commission Arrangements and unfair relationship

 

How DLA Piper Can Help

Our key products and services include:

• Financial institution respondent litigation
• Class action defence
• Regulatory advice and proactive legal risk mitigation
• Experience in redress scheme design and implementation
• Understanding and advising on impacts and risk for ABL and securitised products
• Exits and Investment – Designing and managing transactional solutions both buy and sell side M&A (loan portfolios)

 

Key Solutions in Action

Our relevant experience

We are advising leading financial institutions and automotive clients on all aspects of this evolving risk landscape. Our experience includes:

• Acting for a major motor finance lender in its defence of mass individual County Court claims brought by multiple different claimant litigation firms. The allegations raise a variety and combination of allegations ranging from unfair relationship claims, dishonest assistance of a breach of fiduciary duty/breach of disinterested duties; procuring a breach of duty; and associated remedies. These claims have been heavily impacted by the Supreme Court decision in Wrench, Johnson and Hopcraft.
  
  
• Advising a major UK financial institution, managing their Group Proceedings in Scotland and litigation portfolio in England, advising on litigation strategy via the client’s steering group, and supporting pleading revisions post-Wrench, Johnson, and Hopcraft Court of Appeal decisions.
  
  
• Acting for multiple major financial institutions in relation to Harcus Parker’s application for a Group Litigation Order, concerning the alleged mis-sale of PPI insurance products to over 18,000 customers.
  
  
• Designing and implementing a large-scale voluntary redress scheme for a leading technology platform in the transport sector, following a landmark Supreme Court ruling on worker rights. Our role included strategic input on the design and rollout of the opt-in scheme, as well as litigation risk management in relation to existing and potential claims brought by prominent claimant law firms.
  
  
• Advising global brands including Tesla and British Airways on cross-border class actions and regulatory exposure.
  
  
• Successfully defending Clydesdale Bank in a GBP1 billion funded group action concerning tailored business loans.

 

What Sets Us Apart

We combine legal precision with commercial foresight. Our insights go beyond the legal framework to address:

• Litigation funder dynamics and the future of redress schemes
• Behavioural trends driving consumer claim volumes
• Political intelligence on FCA and Treasury Strategy
• International contagion risk from copycat litigation and regulation

 

Stay Ahead of the Curve

We will be providing tailored briefings to our clients following the Supreme Court’s decision. If you would like to receive our insights or discuss how to prepare your business, whether you are a lender, intermediary or an automotive company, please get in touch with the contacts at the end of the page.

Now is the time to assess your exposure and shape your response. Engaging early allows for strategic planning and liability mitigation – rather than reacting under pressure once claims begin to escalate.

 

Other related experience includes advising:

• A leading consumer creditor provider and online fashion retailer on the strategic defence of mass Payment Protection Insurance (PPI) claims brought by current and former customers. These claims primarily involve “double-dip” claimants who accepted redress offers following mis-selling or commission-based complaints, but now argue that those payments were only part-settlements and seek further compensation. We have provided strategic advice and tactical defence to mitigate the client’s exposure (approx. GBP250 million), including effective case management and legal arguments around limitation and settlement, and assisting in managing our clients' ongoing engagement with the FCA and its redress plans.
  
  
• Royal Bank of Scotland in relation to various interest rate swaps mis-selling cases both at the pre-action stage and in claims commenced across multiple courts, which have arisen from the high-profile interest rate hedging product mis-selling scandal. Having secured strategic victories for our client in court, we continue to advise on a substantial volume of claims and the complex legal issues that continue to arise, with a focus on reputational and regulatory issues they raise for the Bank.
  
  
• A British banking and financial services company (trading as another bank) on a series of complex multi-party actions comprising over 900 claimants challenging the bank’s right to charge break costs on its fixed rate loan product and the rate of interest at which the product was offered to customers. In an important case for the retail banking industry, the bank successfully defended the claims of four of the claimants following a 12-week trial in the High Court in late 2023.
  
  
• A high-cost short-term credit provide on unfair relationship allegations relating to affordability, proportionality of credit checks and mis-selling. Including advising on submissions to FOS and legitimate challenges to FOS’ jurisdiction and chargeability of cases, and client’s regulatory obligations and liaison with the FCA and ICO.
  
  
• A major European bank in its implementation of a court mandated “opt-in” redress scheme for its UK-based customers in relation to its sale of a depository receipt investment product.
  
  
• Multiple payment services companies as to the impact of the Supreme Court decision in Wrench, Johnson and Hopcraft upon their credit broking and intermediary service provisions.
  
  
• A regulated financial services provider on its potential liability to third parties arising from the alleged misuse of its services by a customer involved in a fraudulent investment scheme. The matter involved significant losses to pension investors and raised the prospect of a class action against our client, based on alleged failures in customer due diligence and account monitoring. Drawing on our class action and regulatory expertise, we advised the client on potential litigation risks and regulatory exposure.
  
  
• A major automobile manufacturer on emissions-related regulatory strategy and collective action litigation. We are supporting the client in defending collective action proceedings in the English High Court brought by over 8,600 claimants, who allege the installation and concealment of unlawful defeat devices in certain vehicles. Alongside our Litigation colleagues, we are advising on complex technical and legal issues arising from the proceedings. In parallel, we are assisting the client with its engagement with regulatory authorities in the UK and EU, who are conducting sector-wide investigations into potential non-compliance with emissions regulations. This matter involves navigating intricate regulatory frameworks and broader public policy considerations in the context of environmental law.

 

Our regulatory experience includes acting for:

• UK Finance as a representative of approximately 300 firms across the financial services industry on its response to the FCA’s consultations on the new Consumer Duty, which proposes a new private right of action for contravention of the duty and has the potential to cause unnecessary burden and confusion for firms considering its overlap with FCA Principles 6 and 7. Our role involves collating responses to the first consultation from UK Finance’s members and drafting a response in light of these, advising on UK Finance’s response to the FCA’s second consultation, analysing whether the FCA’s proposed draft rules reflect its stated policy intentions and providing a non-exhaustive list of aspects of the FCA handbook that may need amending in light of the introduction of the Consumer Duty.
  
  
• An FCA benchmark administrator on a review of policies, procedures and controls for compliance with the UK Benchmark Regulation. This work included providing recommendations as well as updating and/or amending their policies and procedures.