Court of Appeal decision on commission disclosure opens door to more consumer claims

In allowing three appeals (Johnson v FirstRand Bank, Wrench v FirstRand Bank and Hopcraft v Close Brothers Limited) the Court of Appeal has delivered claimant-friendly guidance to lower courts dealing with a substantial volume of borrowers’ claims relating to commission disclosures in the context of motor finance lending.

The Court of Appeal’s decision is notable in that it goes further than the FCA’s current rules on commission disclosure in the credit broking context, which require prominent disclosure of the existence and nature of a commission where it could affect impartiality or have a material impact on the customer’s decision to transact, and disclosure of the amount of commission only on a customer’s request.

This is an important legal development with immediate market-wide impacts and potential longer-term implications in various financial services contexts.  For more, read our briefing note - and reach out to us at any time to discuss further.