UK Supreme Court Ruling Eases Bank Fears Over Car Finance Commissions
The UK's Supreme Court reversed a prior decision on car finance commissions, easing banks' concerns about potential redress schemes. The Court clarified dealers' roles in financial arrangements, restoring confidence in the motor finance sector. Banks' US-listed shares rose following this development.
The United Kingdom's Supreme Court on Friday overturned a crucial ruling concerning car finance commissions, a move poised to alleviate banks' concerns about an extensive redress scheme.
Supreme Court president Robert Reed clarified that car dealers arranging vehicle sales and finance did not owe fiduciary duties to customers, countering a surprising earlier Court of Appeal decision that had sent tremors through the motor finance industry. US-listed shares of UK banks appreciated after the court's announcement late in London trading hours.
The Supreme Court also stated that the Court of Appeal misunderstood dealers' commercial interest in customer-finance company arrangements. Although it overturned findings that commissions were bribery, it awarded one claimant over 1,650 pounds, citing an unfair lender relationship. This judgment was disclosed post-market activities to prevent investor disruption, aligning with guidance from Britain's Financial Conduct Authority.
(With inputs from agencies.)
Google News