Motor Finance Commissions: Implications And Outcomes

The Supreme Court judgment in Johnson v FirstRand Bank Limited (London Branch) t/a MotoNovo Finance addresses the lawfulness of undisclosed commissions paid by lenders to motor dealers in car finance transactions. The Supreme Court rejected the Court of Appeal's analysis, concluding that the dealers were not subject to fiduciary duties towards their customers.

Key findings of the Supreme Court judgment

The judgment has significant implications for the motor finance industry and potentially other sectors involving credit brokerage.

Rejection of fiduciary duty

The Supreme Court determined that the dealers in the Johnson case were not subject to fiduciary duties towards their customers. The Court of Appeal had concluded that the dealers incurred both a disinterested duty and a fiduciary duty to their customers when providing a credit brokerage service. However, the Supreme Court found this analysis flawed.