On 25 October 2024 the Court of Appeal handed down its judgment in Johnson v FirstRand, Wrench v FirstRand and Hopcraft v Close Brothers, three conjoined appeals running as a test case for claims concerning the payment of undisclosed commissions by lenders to car dealers arranging finance for customers.

In a unanimous judgment, the Court (Andrews, Birss and Edis LJJ) allowed the claimant consumers' appeals. The Court held:

• that the dealers owed a duty to disclose to the consumers the commission they stood to receive from the lenders, meaning that the lenders were liable to the consumers as payers of the commission;
• in Wrench, that the commission was secret (as in Hopcraft) and Mr Wrench had a claim against the lender at common law as well as in equity. The disclosure of the commission in the terms and conditions of the hire purchase agreement was not enough on the facts of that case to negate secrecy;
• in Johnson, a case that proceeded on the basis that there had been some but not complete disclosure of the material facts relating to the commission, that the lender was liable in equity as an accessory to the dealer's breach of fiduciary duty, and that the relationship between Mr Johnson and the lender was unfair under sections 140A-C of the Consumer Credit Act 1974

The appeals represent a significant win not just for the claimants but for consumers generally and will provide welcome guidance for lower courts deciding motor finance commission claims.

Robert Weir KC, Jonathan Butters and Tom Westwell acted for the successful claimants, instructed by Kevin Durkin of HD Law Limited (in Johnson) and Kavon Hussain of Consumer Rights Solicitors (in Wrench and Hopcraft).

A copy of the judgment is available here.

The judgment has received significant press coverage including in The Financial Times, The Times, The Guardian and The Telegraph.