FCA holds call with market analysts on motor commission cases

The FCA held a call with market analysts just before it published its consultation on its proposal to expand the pause on dealing with complaints about commissions in the motor finance sector. Key points included:

• the FCA’s commitment to ask the Supreme Court to consider the lenders’ applications for appeal as quickly as possible, and to offer to intervene in any hearing that would follow a decision to allow the appeal;
• that the FCA realises there is uncertainty about whether the Court of Appeal judgment applies beyond motor finance – on which the FCA noted that clearly the most acute impact has been in the motor finance market and that any judgment is specific to the facts of the case, but that it is working its way through the judgment to consider carefully what the wider impact might be – all of course subject to what the courts might say;
• in response to an observation that the original cases (on the DCAs) felt like a “product flaw” in relation to which a consumer redress programme would make sense, but that now the scope seems wider, the FCA acknowledged that there is a difference between a faulty product and a relationship issue, so the FCA does need to work through which tools it is most appropriate for it to use to address the harms;
• noting that the judicial review of the FOS decision in the Barclays case is still awaited;
• in response to a question about whether the Court of Appeal findings had surprised the FCA as it presumably had not previously considered there to be any fiduciary or disinterested duty given that neither the original nor the updated CONC rules had required disclosure by the lender of commission, the FCA acknowledged that it obviously had not thought there was such a duty, but that its rules cannot be the final work on it. So the FCA would want to explain in any Supreme Court case what its thoughts were at relevant times as well as speaking about its current work and the broader market impact; and
• on potential timeframes, a normal “quickest” timeframe would suggest the Supreme Court would hear any case most likely over the summer.