On 1 August 2025 the Supreme Court handed down the eagerly awaited motor finance judgment Hopcraft v Close Brothers Ltd; Johnson v FirstRand Bank Ltd; Wrench v FirstRand Bank Ltd [2025] UKSC 33. You can read the full judgment here.
Akash Gohil provided an immediate reaction to the judgment below:
“In my view the Supreme Court’s judgment is pragmatic but fair.
The key takeaway for me is the court’s refusal to apply a broad-brush fiduciary duty on car dealers in these transactions. Going back to first principles, the judgment makes it clear that for a fiduciary duty to exist, there must be an assumption of “single-minded loyalty”. This is not a feature of a typical tripartite car finance transaction between customer, dealer and lender.This acknowledges the commercial reality where each party is acting in their own interest, as I’ve argued when appearing in many of these cases.
I note the court has left the door open for consumers under the Consumer Credit Act 1974 (“CCA”). In one of the cases, the relationship was deemed “unfair” due to the significant size of the undisclosed commission and the misleading impression that the dealer was acting as an impartial broker. The commission was 25% of the credit advance, a fact the Court described as a “powerful indication” of unfairness.
This distinction feels right. It avoids shoehorning a commercial relationship into a fiduciary one, while still providing a clear path for redress where the specific facts point to an unfair relationship for the consumer.
It will be interesting to see the full impact on pending and future claims, especially those with larger commissions and also discretionary commission agreements.
This judgment brings some much-needed clarity but also highlights the importance of the specific facts in each case, particularly under the CCA. I note the FCA’s response to consult on a compensation scheme and the Government’s intent to make changes to the CCA accordingly. Watch this space.”
