Lloyds Banking Group plc (LON:LLOY) has noted the recent Court of Appeal decisions on Wrench, Johnson and Hopcraft relating to motor commission arrangements. The Group also notes the intention of the lenders to appeal the decisions to the UK Supreme Court.
The Court of Appeal has determined that motor dealers acting as credit brokers owe certain duties to disclose to their customers commission payable to them by lenders, and that lenders will be liable for dealers’ non-disclosures. This sets a higher bar for the disclosure of and consent to the existence, nature, and quantum of any commission paid than had been understood to be required or applied across the motor finance industry prior to the decision. Our understanding of compliant disclosure was built on FCA / regulatory guidance and previous legal authorities. These decisions relate to commission disclosure and consent obligations which go beyond the scope of the current FCA motor commissions review.
Lloyds Banking Group is assessing the potential impact of the decisions, as well as any broader implications, pending the outcome of the appeal applications. The Group will update the market, if and as appropriate.
