Supreme Court Spares Lenders £44bn Payout Over Car Finance Loans

Millions of drivers will miss out on compensation after the supreme court spared lenders a potential £44bn bill for hidden commission payments in car finance contracts.

- Kalyeena Makortoff Rupert Jones

In a blow to consumers, the UK's highest court sided with finance companies in a challenge to last October's shock ruling by the appeal court that found commission payments paid by buyers to car dealers were unlawful.

In their ruling yesterday, a panel of justices led by the supreme court president, Lord Reed, only upheld one consumer's case, originally filed by a borrower, Marcus Johnson. Cases brought by two others - alleging that commissions paid to car dealers were bribes and that dealers owed a duty of loyalty to the customer - were rejected. The door is still open, however, to a more limited compensation scheme being considered by the Financial Conduct Authority.

Marcus Johnson told the Guardian: "Even though I won, I just feel like it's a dark day for the UK consumer... I was just hoping it could have helped others claim back what they should not have been charged."

The FCA said yesterday that it would confirm whether it would press ahead with a compensation scheme before the stock markets opened on Monday. It said: "We want to bring greater certainty for consumers, firms and investors as quickly as possible. We will be working through the weekend to analyse the judgment and determine our next steps.

"Our aims remain to ensure that consumers are fairly compensated and that the motor finance market works well."