Reeves could overrule supreme court in £44bn scandal over car financing

The chancellor, Rachel Reeves, is considering overruling the supreme court over a £44bn car loan commission scandal after lobbying by some of the UK's biggest lenders, the Guardian can reveal.

- Kalyeena Makortoff

Under Treasury contingency plans being discussed in case justices decide to uphold the entirety of last October's shock appeal court ruling that customers may be entitled to billions in compensation, the government would retrospectively change the law to cut liabilities for lenders.

Officials have been discussing the feasibility of superseding the supreme court's decision - widely expected to come next week - with the Ministry of Justice and Department for Business and Trade, according to people familiar with the matter.

Such a move would represent a huge intervention by the Treasury, and comes months after Reeves controversially tried to intervene in the supreme court case in January.

The City has been anxiously waiting to see whether justices fully uphold the appeal court decision that paying commission to brokers who arranged the motor loans, without disclosing details of that commission to borrowers, was unlawful.

Rules on such payments are covered by common law, meaning they are set by judges through a series of court decisions, rather than by parliament. New primary legislation would give parliament the final word over the handling and disclosure of commission arrangements to borrowers.