"PPI on wheels" - update on Johnson, Wrench and Hopcraft

The Treasury’s application to intervene

In January this year, five parties applied to intervene in the Supreme Court decision in Johnson, Wrench and Hopcraft, following the Court of Appeal ruling that motor finance brokers owe fiduciary duties to their clients, requiring them to act in their clients' best interests and fully disclose commissions received.

One of those parties was HM Treasury, which sought to intervene to protect firms on the basis that the case had the "potential to cause considerable economic harm and could impact the availability and cost of motor finance for consumers".

The Treasury has, however, not been granted permission to intervene in the case. On 17 February 2025 the Supreme Court determined five applications for permission to intervene in the linked appeals, including that of the Treasury, which some commentators have taken as a sign that the court will not be taking the effect on the economic and general business environment into account in its ruling. This view has had very real effects on the share market, with Close Brothers Group and FirstRand seeing a significant fall in share price following the decision.

On the other hand, it may be that the court simply considered it wasn't necessary to hear interventions from parties who may give similar evidence. To this end, Consumer Voice and the Finance & Leasing Association also had their applications rejected.

In contrast, the Financial Conduct Authority (which is still conducting its review into historical motor finance commission arrangements) and the National Franchise Dealers Association will both have the opportunity to make written and oral submissions to the Supreme Court.

What next?

The Supreme Court hearing is scheduled for early April 2025. 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.

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