2025 Key Legal Issues

2025 looks likely to become a “Year of Transparency” for motor dealers in the UK. Driven by the landmark Court of Appeal decision in Johnson v Firstrand Bank Ltd and the enactment of the Digital Markets, Competition and Consumers Act (DMCCA), the requirements for what counts as sufficient transparency as well the mechanisms for judging and enforcing transparency are shifting.

The Johnson case has intensified scrutiny on commissions in vehicle financing, of course, but it portends even more momentous transformations in the relationships between consumers and dealers. The court ruled that dealers must fully disclose the nature of their relationships with commissions from lenders. In doing this, the court imposed far-reaching fiduciary obligations on dealers. The Supreme Court Court’s decision to accept the appeal means we can expect more developments in the form of a judgement around May this year, along with the culmination of the FCA review into commissions.

Meanwhile, the DMCCA empowers the Competition and Markets Authority (CMA) to directly address unfair practices, imposing fines up to 10% of a company’s turnover without court proceedings. Effectively, the CMA now has extensive investigative and compliance powers in the domain of consumer protection.

For dealerships, this all means taking careful stock of their documents and protocols. Clear communication has always been essential, but dealerships must navigate new obligations and intensified scrutiny regarding transparency in 2025.

This also looks to be an uncertain year for employers as the government fleshes out its stated aims of strengthening employees’ rights within the workplace.

One of the main changes to monitor will be the potential phasing out of zero hour contracts. The government’s stated objective is to grant qualifying workers on zero hours contracts the right to an offer of guaranteed hours. How this will affect the industry will largely depend upon who these changes apply to and how guaranteed hours are calculated, which we will know more about in 2025 after consultations have finished.

A more troublesome change will be the proposed ban on the practice of fire and rehire. Many will remember the recent mass fire and rehire of staff on substantially lower conditions by P&O and, depending on how it is framed, this ban could prevent employers from making any change in an individual’s contract, no matter how small, without the employee’s express agreement.

Whilst most of the major changes announced by the government are unlikely to come into effect until 2026, we expect to get more details this year as the government drafts legislation and consults with stakeholders.

Professor Henry Blair (Senior Counsel) and Mr Paul Carroll (Solicitor)
11.11.2024