Johnson v Firstrand [2024] EWCA Civ 1282

In a ground-breaking victory for consumer rights, the Court of Appeal has opened the door to what is potentially a billion pounds worth of claims for mis-sold motor finance after finding dealers in breach of their fiduciary duty to customers.

The Court of Appeal heard three appeals in which claimants were offered finance by motor dealers to buy second-hand cars worth less than £10,000.00.

The dealer was acting as a credit broker and, in one case, failed to disclose the commission they received from the lender. In the other two cases, this was only partially disclosed in the small print of the credit agreement.

As a result, the lenders have been ordered to repay the commission to the borrowers and this has opened a pathway for significant claims regarding mis-sold, motor finance.

The ruling placed great importance on the relationship between the broker and lender and concluded that consumers needed to know all the material facts that could affect their borrowing decision, including the total commission to dealers, and how it was calculated, to consent to the loan.

Two of the lenders involved in the ruling Close Brothers and FirstRand intend to now appeal to the Supreme Court.

This ruling will prove hugely significant to the large number of similar claims currently being brought in the lower courts and it is hoped that this ruling will influence the FCA review and put an end to the prolonged agony felt by consumers involved.

Here at Box Legal we can arrange After the Event Insurance for financial mis-selling claims so if you are representing claimants in car finance claims, do get in touch to find out more about our Claimsafe After the Event Insurance.

See link to Judgement here:

https://assets.caselaw.nationalarchives.gov.uk/ewca/civ/2024/1282/ewca_civ_2024_1282.pdf