The Supreme Court has rejected Labour Party Chancellor Rachel Reeves’ attempt to intervene in a high-profile case concerning a £44 billion bill faced by lenders involved in a car loan commission scandal. Ms. Reeves had sought to prevent lenders from bearing the massive financial burden, but judges at the Supreme Court dismissed her application, which was lodged last month.
The Treasury submission on Monday warned that the case could “generate a perception that regulation in the UK is uncertain.” The letter, first reported by the Financial Times, also cautioned that “any remedy should be proportionate to the loss actually suffered by the consumer and avoid conferring a windfall.”
“There is nothing pro-consumer about making it harder for people to buy an affordable car for their family. That would be bad for working families,” Ms. Reeves told reporters at the World Economic Forum in Davos, Switzerland, last month. Gary Greenwood, a banking analyst at Shore Capital, said the Treasury’s failed intervention would “come as a disappointment to the market.”
“Ultimately, the situation and potential outcome remains subject to significant uncertainty and, although the mood music had arguably been improving, this news highlights that the process will be far from straightforward in its resolution,” he stated.
“We hope that a common sense ruling can eventually be reached that punishes those that deserve to be punished while sparing those that do not.” Consumer rights advocate Alex Neill, co-founder of Consumer Voice, called the court’s rejection of the intervention “extremely disappointing.”
She added: “An overwhelming majority of car finance customers have told us they are concerned about the practice of dealers being paid commission. And it’s little wonder, as people trust their car dealer to act in their best interests when arranging finance. Yet, this trust is clearly being abused by some dealers in the market.”
The Supreme Court’s decision leaves lenders facing billions in potential liability while regulators and industry leaders brace for the next phase of the legal battle.
