Motor Vehicle Finance Claims: Claims in the UK and Key Developments

The Rise of Motor Vehicle Finance Claims

Motor vehicle finance deals have long been one of the most popular ways for UK drivers to get behind the wheel of a new car. However, a growing number of legal challenges have emerged, particularly around hidden commissions paid by lenders to brokers or dealerships without the consumer’s knowledge. This issue has drawn comparisons to the Plevin ruling, where hidden commissions led to successful compensation claims.

In short, if a lender didn’t tell the consumer about commission payments, they may have been mis-sold the finance deal and they could be entitled to claim compensation.

Recent Key Legal Developments

1. High Court Ruling on Omnibus Claims

Last week there was a major breakthrough when the High Court overturned a decision requiring 5,823 individual claimants to file separate legal claims instead of proceeding under eight omnibus claim forms.

Mr. Justice Ritchie’s ruling means that consumers now have a simpler, more efficient route to justice. Instead of thousands of cases clogging up the courts, omnibus claims allow lead cases to establish key legal principles that can apply to similar claims.

This ruling is a big win for claimants and has given law firms more confidence to pursue large-scale actions against major finance companies, including Blackhorse, BMW Financial Services and Volkswagen Financial Services.

2. The FCA’s Review of Motor Finance Mis-selling

The Financial Conduct Authority (FCA) is also investigating motor finance lending practices. In 2021, it banned discretionary commission arrangements, where lenders allowed brokers/dealers to set their own commission levels—often leading to inflated interest rates for consumers.

While the FCA has yet to order redress, a decision on next steps is expected in May 2025, which is likely to coincide with the Supreme Court decision following the appeal to be heard between 1 – 3 April 2025.

The final decision on this could lead to billions of pounds in pay-outs to affected consumers with lenders already announcing huge reserves in readiness.

The Future of Motor Vehicle Finance Claims

The coming months will be critical for motor vehicle finance claims in the UK. With the High Court ruling supporting omnibus claims, more large-scale legal actions are likely. At the same time, the FCA’s ongoing review and the Supreme Court decision expected before the summer is likely to lead a significant volume of claims.

Stay tuned—this battle is far from over!

How We Can Help

We are working with Law Firms and CMC’s to automate the claims process – ensuring Claimant’s are onboarded efficiently and kept engaged throughout the entire process.   To learn more, or have a demo of our solution please reach out to me.

Author: Sare Brownhill 

Sare has worked in civil litigation for 24 years, in her career she has been both a litigator and latterly Head of Litigation.  She is a qualified Legal Executive.   She now dedicates her time to helping firms thrive within the constraints of CFAs, DBAs and fixed fees by using best in class automation to maximise claimant engagement and automate repetitive, costly work.