Motor finance commissions: has the dust settled?

14 March 2025 / Eddie Flanagan , Harpreet Sandhu

Issue: 8108 / Categories: Features , Commercial , Consumer , Financial services litigation

With shockwaves from the motor finance commissions case continuing to reverberate, Eddie Flanagan & Harpreet Sandhu explain why it is time for the financial services sector to reflect on compliance & customer trust

The Johnson v FirstRand Bank case ruling on undisclosed motor finance commissions has led to industry shockwaves, and massive compensation provisions, raising concerns over rising regulatory costs.
The judgment highlights the need for transparency in the form of clear disclosure, stronger consumer protections, and practical, balanced regulations.
The wider implications of this case include heightened scrutiny, which challenges financial institutions to adapt while balancing compliance costs and innovation.

In November 2024, Santander UK announced that it had set aside £295m to potentially compensate motor finance customers following the landmark Court of Appeal judgment in the combined cases of Johnson v FirstRand Bank, Wrench v FirstRand Bank and Hopcraft v Close Brothers Ltd [2024] EWCA Civ 1282 (‘Johnson’). This provision significantly impacted Santander’s quarterly profits, which fell to £143m from £413m in the previous quarter. This announcement sent shockwaves

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Motor finance commissions: has the dust settled?

The Johnson v FirstRand Bank case ruling on undisclosed motor finance commissions has led to industry shockwaves, and massive compensation provisions, raising concerns over rising regulatory costs.
The judgment highlights the need for transparency in the form of clear disclosure, stronger consumer protections, and practical, balanced regulations.
The wider implications of this case include heightened scrutiny, which challenges financial institutions to adapt while balancing compliance costs and innovation.

If you are not a subscriber, subscribe now to read this content

If you are already a subscriber sign in

...or Register for two weeks' free access to subscriber content

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Motor finance commissions: has the dust settled?

MOVERS & SHAKERS

Muckle LLP—Stacey Brown

Excello Law—Heather Horsewood & Darren Barwick

Ward Hadaway—Paul Wigham