Weil Structured Finance Talking Points

SUPREME COURT PARTIALLY SIDES WITH LENDERS IN AUTO FINANCE COMMISSION CASE, BUT EXPOSURE REMAINS

OVERVIEW

On 1 August 2025, the UK Supreme Court delivered its judgment in the conjoined cases of Hopcraft v Close Brothers Limited; Johnson v FirstRand Bank Limited; and Wrench v FirstRand Bank Limited, providing much-needed clarity on commission payments in auto finance. The Supreme Court largely overturned the Court of Appeal's decision, rejecting two of the claims in full and partially upholding one claim under the Consumer Credit Act 1974.

BACKGROUND

Each of the claimants in the three cases entered into a hirepurchase agreement for a vehicle with either FirstRand or Close Brothers. In each case, the dealer received a commission from the lender for introducing the customer, which was either not disclosed at all or only partially disclosed.