“PPI on wheels”: The FCA intervenes in Johnson, Wrench and Hopcraft

This article provides insights into the FCA's intervention in the Motor Finance Appeal in the Supreme Court.

The Supreme Court hearing of Johnson, Wrench and Hopcraft came to a close last Thursday (3 April 2025), with judgment anticipated in July 2025.

The final day’s session saw the Financial Conduct Authority (FCA) make oral submissions, having published its written submissions earlier in the week.

In making its submissions, the FCA hoped to assist the court in understanding the legal landscape relevant to the appeals, and to highlight the opportunity for the court to provide authoritative guidance on the tort of bribery, the law on secret commissions, and section 140A of the Consumer Credit Act 1974.

What did the FCA say?

In broad overview, the FCA submitted that the Court of Appeal's decision that motor dealers generally owe fiduciary duties to consumers was a decision that went too far which, if upheld, could have significant implications for other intermediaries.  

However, the FCA also cautioned against accepting the defendants’ submissions that the tort of bribery and the 'disinterested' duty should be discarded in these circumstances. Its concern was that this could create a lacuna in the law: where an agent didn’t owe fiduciary duties, the principal would be left without protection against conflicts of interest.

If the court accepts the FCA’s submissions on these points, then it may take a case outside of the realm of bribery – if a commission has been disclosed the arrangement can't generally constitute bribery. This suggests that terms and conditions disclosing the possibility of commission being paid to the dealer may be sufficient for the purposes of disclosure.

What next?

There is clearly much at stake: a win for the claimants would mean compensation claims of a size and scale not seen since PPI, with implications potentially reaching far beyond the motor finance industry; a win for the defendants could serve to stabilise the current legal framework.  

The FCA told the court it would be helpful for judgment to be given as soon as possible: the appeal in The King on the application of Clydesdale Financial Services Limited v FINANCIAL OMBUDSMAN SERVICE LIMITED is due to be heard on 1 July 2025, and so a decision in Johnson before then may provide welcome and much needed clarity.

In the meantime, firms should be considering the implications of any decision on their businesses, both in the context of the wider Supreme Court decision and the ongoing FCA review.

Read more
•    Redress scheme
•    Insight into the Court of Appeal decision: brokers' duties and secret commissions
•    FCA review: discretionary commission arrangements

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