Millions of motorists pursuing motor finance compensation could be able to progress larger group legal claims against lenders after this week’s Court of Appeal ruling on how thousands of cases should be handled.
The judgment in Angel & Ors v Black Horse Ltd & Ors, handed down on June 30, confirmed that claims from motorists against eight major motor finance lenders can continue through the courts as multi-party claims.
Read Motor finance redress: from commission to compensation
Barings Law, which brought the claims, said the decision could pave the way for further large-scale consumer litigation against motor finance lenders and give motorists an alternative route to the Financial Conduct Authority’s delayed redress scheme.
Group claims advance
The case concerns around 5,800 legal claims brought by motorists against lenders including Black Horse.
The Court of Appeal dismissed lenders’ appeals against an earlier High Court decision which allowed thousands of motor finance commission claims to proceed together on single claim forms, rather than requiring each motorist to issue a separate legal claim.
The claims relate to alleged unfair relationships under the Consumer Credit Act 1974, including issues around the non-disclosure of discretionary commission arrangements paid by lenders to car dealers.
The ruling is expected to influence how lower-value consumer claims involving common issues are managed by courts in England and Wales.
Barings Law said the decision was “a decisive victory for motorists across England and Wales” and has launched a new claims model, My Free PCP Claim, which it said would allow successful claimants to keep 100% of any damages recovered.
Robert Whitehead, chairman of Barings Law, said: “This ruling is a step towards securing true justice for millions of drivers who were mis-sold car finance over many years. Those consumers have been left waiting while lenders challenged every decision made by the regulator and the courts.
“Today’s judgment finally brings certainty and allows these claims to continue progressing through the courts as they always should have done.
“We’ve always believed that consumers should be able to pursue the strongest legal route available without unnecessary barriers, in order to recover the full compensation to which they are entitled. That’s why we’re launching “My Free PCP Claim” today.
“If we win a claim, our clients will receive 100% of their damages. We’ll limit our costs to whatever contribution the losing party pays towards their legal fees and, if our costs are higher than that, we’ll waive the difference, so our clients keep every penny of the compensation they recover.”
Redress delays continue
The ruling comes as the FCA’s motor finance redress scheme remains under legal challenge.
The FCA announced in March that it would introduce an industry-wide scheme for consumers who were treated unfairly in motor finance agreements between 2007 and 2024. The regulator has estimated an average payout of around £830.
However, the scheme has faced legal challenges from lenders and consumer representatives, delaying payments which had been expected to start sooner.
Barings Law said motorists who had been waiting for the FCA scheme should consider whether litigation could offer a stronger route to compensation, particularly where legal costs are not deducted from damages.
Whitehead added: “We have heard the frustration from motorists. Consumers have been told to wait, and then told to wait again, while legal challenges continue to delay the FCA’s proposed redress scheme. Meanwhile, the courts haven’t stood still.
“We’ve spent years investing in these cases because we believed consumers deserved better than being told to wait for a redress scheme that might never happen, when there’s already a clear legal remedy available to them. Consumers are once again being given the choice: allow the redress scheme to take its course, or allow legal experts to guide their case forward with the promise of full compensation.”
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