The Supreme Court has this afternoon handed down its long-awaited judgment in the three linked car finance commission claims (available here). The finance companies’ appeals in Johnson and Wrench were allowed. The claim in Hopcraft succeeded only on the question of unfairness. All the claims in equity and tort failed. The claims relating to bribery failed whilst it was held that the car dealers did not owe their customers any fiduciary duties.
The finance sector (and perhaps H.M. Treasury) will be relieved that the Court of Appeal’s surprising decision last year has now been reversed, and certainty returned to the law. Customers can no longer assume second-hand car salesmen will act as the customer’s fiduciaries and put their own commercial interests second to the customer’s interests; it remains an arm’s length transaction in which everyone is acting for themselves.
The only successful was Mr Johnson’s claim that the payment of the commission rendered his relationship with FirstRand unfair such that he was entitled to compensation. The Court reached that conclusion by holding the size of the commission was high when compared to the amount of credit, there was an undisclosed link between the lender and the dealer and, finally, whilst Mr Johnson did not read the documents, the terms relating to commission were not given any prominence.
Once the 109-page decision has been fully considered, further analysis will follow.
Matthew Gillett
1 August 2025