31 March 2025
Dr Derek Whayman, Lecturer in Law at the University of Reading said: “In the Johnson v Firstrand Bank Ltd case, the Supreme Court will address a potential 'PPI 2.0' scandal involving undisclosed commissions paid to car dealers by finance firms.
“The Court of Appeal previously ruled that buyers could claim these secret fees back from lenders as well as dealers - crucial because finance firms have deeper pockets. With potential liabilities reaching billions - perhaps £2.5 billion for Lloyds Bank alone - the financial stakes could not be higher.
“The Supreme Court must confirm several critical points: what constitutes sufficient disclosure of fees; whether small enough fees might not require explicit disclosure; and most importantly, when lenders are liable if dealers fail to disclose commissions properly. The current position is that this they are liable simply if there was anything less than full disclosure. This is a low bar the Supreme Court may raise.
“The reason for the uncertainty is the adaptation of centuries-old rules to modern settings. But until the Supreme Court provides clarity, reliable consumer advice remains impossible. Without clarity, it will be impossible to create a settlement scheme that allows aggrieved car buyers to claim redress efficiently rather than through expensive and slow court processes.”
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