Duncan ScottThe FCA has written to the Supreme Court supporting the application of the lenders in the Hopcraft, Wrench and Johnson motor finance commission cases for expedition of the court’s decision on the application to appeal.
The letter explains the FCA’s role in supervising the conduct of motor finance business and notes that the applications “raise a number of important points of law in relation to the law of bribery and fiduciary duties”, impacting both backward looking compensation liabilities and forward looking changes to business models.
The FCA confirms there are thousands of cases pending in the County Court and before the FOS, and “it is highly desirable” that these proceed “on the correct interpretation of the legal principles and to avoid inconsistent outcomes”.
The letter goes on to explain the significant provisions some firms have already made in relation to potential costs, and that some analysts have increased their forecasts for the likely size of compensation firms will face and the impact on their new business – and that there has already been a material impact on some firms’ share prices.
The FCA explains the context of its work on DCAs, the subsequent pausing of complaints, and now its proposal also to pause the time for complaints that are non-DCA motor finance complaints given the significant increase in these. It says that the issues raised in the lender applications to the court are likely to be material in considering the merits and proposed remedies in many of the pending complaints, and also that prompt resolution would help the FCA in deciding what regulatory intervention (if any) would be appropriate.
The FCA notes its ability to seek permission to intervene in any appeal, and requests the court both to determine the applications for appeal, and, if it grants these, the substantive appeal as soon as possible.