HM Treasury Intervenes in Johnson
Matters continue to develop in the discretionary commissions drama. As we previously reported, the Supreme Court has officially agreed to hear the appeals in Johnson, Wrench, and Hopcroft between the 1st and the 3rd of April this year.
The Treasury has now stepped into the fray, warning judges that taking the side of buyers risks harming the UK economy, and seeking to intervene in the Supreme Court proceedings. The Chancellor and the Treasury are concerned about a chilling effect on Britain’s wider financial sector if the decision stands, and in an application to the Court said that a ruling against lenders could “adversely affect the UK’s reputation as a place to do business, with a consequent impact upon economic growth”. It added that “The Treasury will seek to persuade the court that any remedy should be proportionate to the loss actually suffered by the consumer and avoid conferring a windfall upon her”.
The Financial Conduct Authority has also applied to intervene alongside the Treasury, while the industry bodies UK Finance and Leasing Association and UK Finance could also join.
Already, rumours are swirling that a few big names may look to scale back their presence in the UK or even abandon car finance here altogether. The fear is that if dealerships and financers are held to a strict fiduciary standard, the administrative burden and financial risks could outweigh commercial benefits.
For consumers, this means that stricter rules and heightened caution among lenders could make it harder to obtain car finance.
Of course, no one wants to be caught off guard by a ruling that could carry significant financial repercussions. We’ll keep you posted on any twists in this landmark case. Stay tuned for more updates as the clock ticks down on what promises to be one of the most closely watched legal showdowns of the year.