Drivers who entered into leasing contracts on their vehicles will now be missing out on compensation claims after The Supreme Court rejected arguments that customers should have been informed about “secret” commissions paid to car salesmen when they arranged loans to fund vehicle purchases.
Bankd had set aside billions of pounds to pay for potential claims which could have had an estimated cost of £44bn, putting it on a par with the PPI scandal that cost £50bn.
Manchester based on Leasing Options has welcomed today’s Supreme Court judgment which they say provides much‑needed legal clarity on car finance commission arrangements.
The ruling overturns the Court of Appeal’s earlier decision and confirms that brokers arranging finance do not owe a fiduciary duty of loyalty to customers. It also establishes that non‑disclosure of commission, by itself, does not constitute bribery or dishonest conduct.
However, the judgment does not close the debate around commission structures. The Financial Conduct Authority (FCA) continues to investigate Discretionary Commission Arrangements (DCAs), where dealers could increase customer interest rates to boost commission. The FCA has indicated that an industry‑wide redress scheme could be proposed as early as September 2025.
Mike Thompson, Chief Operating Officer at Leasing Options, said: “The Supreme Court’s decision provides welcome legal clarity for our sector. It confirms that brokers do not owe a fiduciary duty to customers, and that the non‑disclosure of commission alone does not constitute bribery or dishonest conduct.
“While this ruling reduces legal uncertainty, it doesn’t remove the need for transparency. As brokers, we must continue to focus on best practices—particularly around disclosure, contractual clarity, and commission structures.
“The FCA’s ongoing review of discretionary commission arrangements remains highly relevant, and we are preparing for any industry‑wide outcomes, including the potential for redress. This is a moment for the sector to further show leadership in rebuilding consumer trust through transparency and consistency. The high standards of Leasing Options, so many of our peers also aim for needs to be the norm and not unusual’’
