In August 2025, the UK Supreme Court largely overturned parts of a Court of Appeal decision on undisclosed car finance commissions, but confirmed key fairness duties. The FCA is now finalising a nationwide redress scheme, with final rules due in early 2026 and the complaint pause lifting on 31 May 2026. If you took PCP/HP finance since 2007, you may still be owed a refund.
What the Supreme Court actually decided
On 1 August 2025, the Supreme Court handed down judgment in three linked appeals (including Hopcraft v Close Brothers and Johnson/Wrench v FirstRand/MotoNovo).
The Court rejected the idea that car dealers owe a fiduciary duty as brokers, which meant consumers could not base claims purely on “bribery” or breach of fiduciary duty because a commission was paid. However, the Court also confirmed that fairness under consumer credit law still matters—undisclosed, high commissions and ties can make lender–borrower relationships unfair.
The route to compensation is not closed. It just shifts the focus from “secret commissions = automatic breach” to “was the deal unfair because of what was (not) disclosed and how the interest rate was set?” That is exactly where the regulator has landed.
The FCA’s redress scheme: Where we are in January 2026
Following the ruling, the Financial Conduct Authority (FCA) proposed an industry-wide compensation scheme for customers who were treated unfairly between 2007 and 2024, especially where discretionary commission arrangements (DCAs) let brokers push up interest rates.
The FCA signalled an overall redress cost potentially in the £9bn–£18bn range, with final rules due early 2026 and the pause on complaint handling lifting on 31 May 2026.
The FCA has already reminded firms to align with the Supreme Court and communicate clearly with customers about commissions and fairness factors (including the size and nature of any commission, and the extent of disclosure).
Who can claim?
You may be eligible if you:
- Took PCP or HP on a car, van or motorbike from April 2007 onwards.
- Weren’t told about a commission paid by the lender to the dealer, or the disclosure was unclear.
- Suspect your interest rate was higher because a broker could increase it to earn more.
Even if you no longer have the vehicle or paperwork, your lender should hold records. National Claims can help you check quickly.
What compensation could include
While the FCA’s final calculation rules are due in early 2026, redress typically aims to put you back where you would have been without the unfairness. That can include:
- Refund of overpaid interest/charges caused by undisclosed or unfair commission practices.
- Statutory simple interest (commonly quoted at 8% per year) on the net amount you overpaid, where applicable.
- Correction of your credit file if it was impacted by an unfair agreement.
Quick estimate table (illustrative)
| Scenario | Agreement Type | Possible Redress Components |
|---|---|---|
| Undisclosed commission with inflated APR | PCP (2016) | Interest difference (what you paid vs fair APR) + potential 8% simple interest on overpayment |
| Fixed commission undisclosed but no APR uplift | HP (2018) | Partial refund reflecting disclosure fail + potential 8% simple interest |
| Discretionary commission, poor disclosure | PCP (2019) | Refund of uplifted interest + potential 8% simple interest; possible file correction |
Note: Final outcomes will depend on the FCA’s scheme rules and your individual facts.
How to start your claim (the fast track with National Claims)
Experts recommend getting your claim logged before the complaint pause ends so your case is ready for assessment when the scheme opens. Here’s a simple route we operate:
- Free eligibility check. Tell us your lender, dealer and approximate dates.
- Data retrieval. We request your agreement and commission data from the lender.
- Assessment. We compare your APR to fair benchmarks and identify disclosure failures.
- Submission. We prepare and submit your claim under the FCA framework once live.
- Outcome. We chase the lender’s redress decision and challenge shortfalls where appropriate.
Timelines you should know
- Early 2026: FCA to publish final rules for the redress scheme.
- 31 May 2026: FCA will lift the pause on complaint handling; firms must resume progressing cases.
- After final rules: Expect structured assessments and offers across 2007–2024 agreements, with clear time limits for responses and access to the Ombudsman if needed.
For background, the Official Receiver has also published a gov.uk update acknowledging the Supreme Court judgment and indicating guidance will align with the FCA’s scheme.
Frequently Asked Questions: Car finance ruling & compensation (January 2026)
1. Did the Supreme Court kill off car finance claims?
No. The Court removed fiduciary duty/bribery as a default route but left unfair relationship claims firmly on the table, especially where commissions were high/undisclosed and rates were inflated. The FCA is proceeding with a national redress scheme to fix this at scale.
2. What if my agreement used a discretionary commission?
That’s the prime focus of the scheme because DCAs incentivised higher APRs. Expect redress where unfairness is found.
3. What if my commission was fixed, not discretionary?
The FCA has indicated scope for redress where disclosure fell short and unfairness is evidenced, even beyond DCAs. Final rules will confirm the exact scope.
4. Do I need to wait until May 2026 to act?
No. You can start now. We can gather your data and build your case so it’s queue-ready when the scheme goes live. The FCA’s pause affects lender deadlines, not your right to prepare a claim.
5. How much could I receive?
Analysts expect most offers to be under £950 per agreement on average, but outcomes vary widely with APRs, term, and commission mechanics. We’ll calculate your individual loss and pursue the maximum fair amount.
Why choose National Claims
- Specialist claim builders experienced in financial mis-selling and consumer redress.
- Clear, no-win, no-fee terms.
- We manage everything: data requests, analysis, submissions, and negotiations.
- Integrated support if your situation touches accidents at work, housing disrepair, medical negligence, spinal/brain injury, or road traffic accidents, ensuring nothing falls through the cracks.
Mandatory statement: Customers pay up to 25% (incl. VAT) of the amount recovered towards solicitor costs and if you cancel outside your cooling off period, you may be charged a fee.
Ready to check your eligibility?
Don’t wait while your claim window closes. Speak with National Claims today. We’ll connect you with experienced solicitors who understand your case and fight for the maximum compensation you deserve.
You can confirm how many mis-sold agreements you have by completing our online form.
About National Claims
This article was written by the National Claims content team. Our specialists have years of experience helping people across the UK with personal injury, road traffic accident, and housing disrepair claims. We work alongside regulated solicitors to ensure our information is accurate, up-to-date, and genuinely useful for anyone seeking to understand their rights after an accident.
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