Supreme Court: Two in five interventions allowed
Claimant lawyers yesterday celebrated the Supreme Court’s decision to reject HM Treasury’s bid to intervene in the motor finance appeal.
Only two of the five parties that applied to intervene were given permission: the Financial Conduct Authority and National Franchise Dealers Association.
They will be able to make written submissions of up to 20 pages and oral submissions of 30 minutes.
The Finance Leasing Association and Consumer Voice were also refused permission. The Supreme Court did not explain these decisions.
In three conjoined cases, the Court of Appeal found it unlawful for car dealers, acting as credit brokers, to receive a commission from the lender without obtaining the customer’s informed consent.
In January, the Treasury announced that it had applied to intervene on the basis that the ruling could have a significant and potentially damaging impact on the motor finance market.
One of the claimants is represented by Bradford-based HD Law, supported by Cheltenham firm Sentinel Legal.
Sam Ward, a director of Sentinel, said: “The Supreme Court’s decision to refuse the Treasury permission to intervene is a clear signal that consumer justice will not be dictated by political influence.
“The Treasury’s attempt to get involved raised serious concerns about whether the government was prioritising lender stability over consumer redress. This ruling confirms that the case will be judged purely on legal merit, not economic convenience.
“For too long, lenders have profited from hidden commissions and undisclosed fees, leaving consumers to foot the bill. The Supreme Court must now decide the issue without interference, ensuring that the financial industry is held accountable for its past mis-selling practices.”
Writing for Legal Futures last week, lawyers from Manchester firm Consumer Rights Solicitors – which acts for the other two claimants – argued that the proposed intervention breached the constitutional separation of powers.
They said: “[W]here the government is sounding alarm bells and informing the court of an impending economic Armageddon and the court should rule in a particular manner, then the government seems to be attempting to wield some unwanted influence on the court.”
A Treasury spokesman said yesterday: “We respect the court’s decision to not grant our application to intervene in the Hopcraft case and will monitor it closely.”
But the Treasury maintains that it was appropriate to seek to share its perspective on the potential impact of the Court of Appeal’s judgment.
Alex Neill, co-founder of Consumer Voice, said: “It’s extremely disappointing to be refused permission to intervene in this case given how important the consumer experience in this market is.
“However, we hope that the Supreme Court will side with consumers and uphold the decision of the Court of Appeal.
“An overwhelming majority of car finance customers have told us they are concerned about the practice of dealers being paid commission. And it’s little wonder, as people trust their car dealer to act in their best interests when arranging finance.
“Yet, this trust is clearly being abused by some dealers in the market.”
It was, Ms Neill said, “a further blow” that the Supreme Court had allowed the National Franchise Dealers Association to represent dealers’ interests at the hearing.
The association said yesterday that, “as the representative of the consumer facing part of the sector, [it] understands the needs of UK consumers”.
Speaking last year when the Supreme Court agreed to hear the appeal, its chief executive, Sue Robinson, said: “The automotive sector plays a vital part of the UK economy and the uncertainty caused by the recent findings threatened to undermine the whole vehicle sales and lending infrastructure.
“[The appeal] will be very welcome news for our members and a very positive step in the right direction for our industry.”
Elizabeth Comley, chief operating operator and head of group actions at Slater & Gordon, said the Treasury was seeking to save financial institutions that “locked consumers into agreements that were neither transparent nor fair”.
She continued: “The consumers we represent deserve accountability and redress when they have been wronged and it is crucial that there remains a clear separation of powers in matters of this magnitude.
“The Supreme Court decision… underscores the need for decisions to be made independently and transparently, without political influence.”
She added that “the war waged on consumers by financial institutions is far from over”, describing the Financial Ombudsman Service’s decision to impose a £250 case fee as “a deliberate attempt to prevent consumers from being compensated”.
“While some individuals have the time, knowledge, and ability to instigate claims themselves, many do not, and consumers have the right to legal representation. This fee further isolates those in need of legal services the most.”
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