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UK Court Allows Mass Car-Finance Claims to Proceed Alongside FCA Redress Scheme
The Court of Appeal rejected an appeal by a major UK lender seeking to halt omnibus claims by drivers. The ruling opens the possibility of compensation claims outside the FCA's £9.1 billion redress scheme.
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Judges in the Court of Appeal dismissed an appeal by one of the UK's largest lenders that sought to block omnibus claims on behalf of a large group of drivers affected by car finance commission arrangements. GB News reported that the decision sided with the claimants and potentially allows mass compensation demands to proceed outside the Financial Conduct Authority redress scheme.
The FCA confirmed its final compensation policy for the car-finance redress scheme will cost £9.1 billion, of which £7.5 billion covers 12.1 million eligible agreements at an average of £829 per agreement.
Under the FCA timelines the vast majority of claims are expected to be settled by January 2028. At the start of May the FCA stated it had received four legal challenges to its plan from Consumer Voice, represented by Courmacs Legal Ltd, Volkswagen Financial Services, Mercedes-Benz Financial Services, and Crédit Agricole Auto Finance.
Consumer Voice argues that some drivers could be owed more than the £829 average.
Alex Neill, co-founder of Consumer Voice, stated: "We support a redress scheme, but this one does not go far enough. " The FCA stated that its redress scheme is the simplest route for consumers and the most efficient way for firms to put things right.
It warned that alternative approaches using claims management companies or law firms would be slower and cost firms more, and claimed that such companies could take up to 30 per cent of a payout.
