The country’s top judges agreed that banks should only pay compensation in the most serious cases of motor finance meling.
On Friday, the Supreme Court dismissed most of the lower court verdict that the shares were sent to the affected banks last year. The decision also faces a compensation program, which analysts had earlier estimated that banks would cost tens of billions of pounds.
The Financial Conduct Authority said it would confirm it before the markets opened on Monday whether it would move forward with its plans. “We will work to analyze the decision over weekends and determine our next steps,” a FCA spokesman said in a statement. “If we decide to suggest the refrigerator scheme, we will consult a large scale.”
Judge Robert Red said the decision was issued after the London stock markets were closed to disrupt any market. The Lloyds Banking Group PLC and the Close Brothers Group PLC American Depository Receipts were more than 4 % in London at 6:30 pm.
The court said the car dealers could work in their business interests, and reject most of the arguments that dealers selling loans would have to get aware of consumers for the commission.
Judge Red said, “The dealer was not sincere: he says, a person is fully obliged to work in the interest of another person,” said Judge Red. “On the contrary, the car dealer was always pursuing his business interests in obtaining car sales on a profitable terms.”
The judges upheld one of the appeal’s decision, saying that one of the contenders – a case has been brought by Marcus Johnson – that the user was accused and the fact that the user is expected to read a long legal agreement to understand the size of the fee. He was not even told that his lender, Firstrand Limited, has the right to deny the loan in the first place.
“I am happy for him,” said Johnson’s lawyer Kevin Dorkin. “This is a really good win for consumers because they have now got an angle and way in court.”
Next steps
Banking chief Peter Ruth Well at KPMG said that the affected banks would still need to continue the preparations to pay compensation to eligible consumers. “But they can do so with more confidence that it will focus on the management of the discretionary commission and the issues where all historical commissions instead of unfair relationships violate the Consumer Credit Act.”
Professional services firm BDO said the decision could still be a reaction between $ 5 billion and $ 13 billion, or more, the FCA needed about its next steps. Prior to Friday’s decision, analysts estimated that the total bill for compensation could be higher for $ 30 billion.
The previous judges said that the commission was treated unfairly to the loan borrowers without giving an awareness of the commission.
The close brothers said in a statement that he was considering the decision and would make further announcements appropriate. Frestland did not immediately respond to a request to comment.
The decision, “the Finance and Leasing Association, an industry company, said that the decision” accurately reflects the roles and responsibilities of dealers, lenders and consumers, and has restored faith and explanation in the largest consumer credit market in the UK. “
“The FCA now has a legal explanation that the FCA now has a legal explanation that if a resolution scheme is needed, continue its work to continue, and it is evident that the claimant is now dismissed by the law firms and the CMC to the lenders.”
What does Bloomberg Intelligence say:
The provisions of $ 1.7 billion could be sufficient to hide the car loan risks of Louids and UK colleagues, when the Supreme Court looks at the lower court results and significantly harassed the lenders’ legal exposure. This decision is a relief for the sector and allows lenders to effectively avoid the scandal, costing up to $ 30 billion.
– Tomas Notazel, Senior Analyst, Bank
Photo: On Friday, February 3, 2023, cars Photo Credit: Chris Rut Cliff/Bloomberg
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