Prime Minister Rachel Reeves’ attempt to intervene in a groundbreaking case over a controversial car loan was blocked by the UK Supreme Court.
The Supreme Court case, set for April, hears an appeal by the finance company after the appeal court finds it is illegal for the lender to pay the committee to the dealer without the client’s consent.
It also said that if customers were not notified of the arrangement, they should be compensated, and estimated that they could be forced to pay up to £300 billion to the industry.
The Treasury said that the Treasury, which stepped in amid concerns about possible impact on the broader automotive finance sector, respected the Supreme Court’s decision.
Most of the new cars, and many used cars, are purchased under financial contracts.
In 2021, the Financial Conduct Authority (FCA) banned transactions in which dealers received fees from lenders based on interest rates charged to customers.
He said this would provide an incentive for buyers to charge higher interest rates than the required interest rates.
Since January, we have been considering whether compensation should be paid to those who made these transactions before 2021.
This has created the prospect that banks and other lenders will have to pay a total of millions of pounds.
Last month, a decision in the Court of Appeals expanded the net of people who could be compensated.
Some analysts estimate that the bill could be the largest compensation scheme related to financial instruments since Payment Protection Insurance (PPI) SAGA.
The government said last month that it wanted the motor vehicle sector to “support millions of drivers” while it wanted to ensure that customers were bailed out.
He expressed concern that the size of the lender’s compensation bill could undermine the competitiveness of UK banks.
A Treasury spokesperson said Monday: “We respect the court’s decision not to allow applications to intervene and monitor it closely.”
The court also rejected applications to intervene from consumer voice, compensation advisors and trade agencies of the Finance & Lease Association.
Approved an application from the FCA and approved the National Association of Franchise Dealers to the trade agency.
Due to limited court times, we may refuse to intervene from parties who believe they may provide similar evidence.
“It is very rare for a government to intervene in court decisions that are not directly related, particularly to pursue policy issues,” says Wayne, who leads automotive finance practices at law firm Shoosmiths. Gibbard said.
He said the Supreme Court case in April was the final step in the legal process regarding “secret and payment,” and after the court’s conclusion, the FCA considered what kind of relief will be paid. He added that he would do so.
“Most of the time you’ll see it around May, and it’s likely to involve some kind of consultation,” he said. The FCA has set the end of 2025 as a deadline to resolve all cases.
In early morning trade on Tuesday, Close Brothers Group shares fell about 2%, while Lloyds Banking Group rose 0.7%. Both suffered a sharp fall on Monday.
